Canaccord upgraded Rio Tinto (NYSE: RTP) to Buy from Hold citing valuation following the severe price decline following BHP Billiton's (NYSE: BHP) dropped bid.
UBS upgraded Itron (NASDAQ: ITRI) to Buy from Neutral citing valuation and defensive business mix.
Jefferies upgraded shares of HealthSouth (NYSE: HLS) to Buy from Hold on valuation and maintains a $13.50 target.
Goldman upgraded Applied Materials (NASDAQ: AMAT) to Buy from Sell and added shares to its Conviction Buy List citing valuation. The firm also upgraded the Semiconductor Capital Equipment Sector to Attractive.
Morgan Keegan believes Cisco Systems (NASDAQ: CSCO) will emerge from the slowdown as a stronger company with greater market share and expansion into adjacent markets. Shares were upgraded to Outperform from Market Perform.
Pfizer (NYSE: PFE) was upgraded to Overweight from Equal Weight at Barclays.
Daimler (NYSE: DAI) was upgraded at UBS to Neutral from Sell.
Friedman Billings upgraded Mariner Energy (NYSE: ME) to Market Perform from Underperform on valuation and the company's upcoming catalysts in the deepwater GOM.
Intel (NASDAQ: INTC) was downgraded to Neutral from Buy at Goldman.
Deutsche Bank cut Hess Corp (NYSE: HES) and Marathon Oil (NYSE: MRO) to Hold from Buy and Suncor (NYSE: SU) and ConocoPhillips (NYSE: COP) to Sell from Hold after cutting their oil price forecast for 2009 to $60/bbl and 2010 to $58/bbl.
Merrill downgraded Akzo Nobel (OTC: AKZOY) to Neutral from Buy on expectations the company's coatings end markets will worsen and chemicals division will see pressure next year.
Monster (NASDAQ: MNST) was lowered at Citigroup to Hold from Buy.
MOST NOTEWORTHY: Energy East, SunTrust Banks and Suncor were today's noteworthy upgrades:
Jefferies upgraded shares of Energy East (NYSE: EAS) to Buy from Hold on valuation, pointing out the return on the transaction if the Iberdrola/EAS merger deal closes is 21.9%. The firm raised their target to $28.50 from $25.50.
Baird upgraded SunTrust Banks (NYSE: STI) to Outperform from Neutral citing valuation and notes the company is unlikely to need to raise capital.
CIBC raised Suncor (NYSE: SU) to Outperformer from Sector Performer following news that Alberta's Energy Resource Conservation Board has lifted restrictions on production on the company's Firebag SAGD project.
OTHER UPGRADES:
Sterling Bancshares (NASDAQ: SBIB) was lifted to Outperform from Market Perform at Keefe Bruyette.
Vodafone (NYSE: VOD) was upgraded at Morgan Stanley to Equal Weight from Underweight.
MOST NOTEWORTHY: European banks, the Paper and Forest Products sector, Kindred Healthcare and Convergys were today's noteworthy upgrades:
Keefe Bruyette upgraded the European Banks sector to Neutral from Underweight on valuation as they see limited downside from current levels. Included in the firm's top picks are HSBC Holdings Plc (NYSE: HBC) and Banco Santander SA (NYSE: STD).
Credit Suisse upgraded the Paper and Forest Products sector to Overweight from Underweight citing valuations and expectations that fundamentals will bottom this fall. The firm raised shares of Temple-Inland Inc (NYSE: TIN) and Smurfit-Stone Container Corporation (NASDAQ: SSCC) to Outperform from Neutral.
Friedman Billings upgraded shares of Kindred Healthcare Inc (NYSE: KND) to Outperform from Market Perform on valuation following the recent pullback and believes the company is well-positioned to beat modest expectations over the remainder of the year. The firm raised their target to $36 from $29.
Oppenheimer raised Convergys Corporation (NYSE: CVG) to Outperform from Perform on valuation, as they believe investors should look at the company's business lines separately. Their sum of parts valuation yields an $18 target.
OTHER UPGRADES:
Suncor Energy Inc (NYSE: SU) was upgraded to Overweight from Neutral at JP Morgan and to Outperform from Market Perform at Friedman Billings.
UBS upgraded BT Group Plc (NYSE: BT) to Neutral from Sell.
MOST NOTEWORTHY: UCN Inc, Astronics and SunTrust Banks were today's noteworthy initiations:
Merriman expects UCN Inc (NASDAQ: UCNN) to further expand its contact center product set and believes it is likely to be sold to a larger provider expanding within the hosted contact solution market over the longer term. The firm started shares with a Buy rating.
Jesup & Lamont initiated Astronics (NASDAQ: ATRO) with a Neutral rating. The firm wants to see a change in the backlog visibility and more clarity on the ramp-up schedules of some new programs. For now, they view shares as fairly valued.
Friedman Billings resumed coverage of SunTrust Banks (NYSE: STI) with an Underperform rating and $37 target and cites credit deterioration and uncertainty regarding credit costs.
"The best thing to do in this market volatility is to take a deep breath and say, 'This too shall pass'," says Neil Macneale, who buys only stock split candidates for his 2-for-1 newsletter. Here is his latest.
"In general, getting out of the stock market at this time would be exactly the wrong thing to do. If 'buy low, sell high' means anything, we should be buying stocks now with whatever cash we can find. Otherwise, the ship will sail without us. Of course, given the exact market bottom is not knowable until after the fact.
"Indeed, new purchases may not be perfectly timed, but we continue to believe that it will be better than not buying at all. And because our policy with our 2-for-1 portfolio is to buy something every month, at least one of our purchases over the next several months will be very close to perfectly timed.
Suncor (NASDAQ: SU) announced a two-for-one share split.
SU, an integrated energy company with Canadian oil sand operations, closed at $102.84 Wednesday. WTI Crude oil is recently up 0.30% to $100 according to Bloomberg.
SU March option implied volatility of 33 is below its 26-week average of 36 according to Track Data, suggesting decreasing price risks.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
In his Block Trader Oil & Gas, Peter Way follows the big hedge funds and market makers to find out what they are doing. Here's a look at his top oil plays.
He observes, "The hedgers at the NYMEX are protecting their crude oil positions in ways that indicate they see continuing upward pressure on prices."
Based on this hedging activity, he states, "The outlook for the next 12 expiration months that the by major players at the crude oil table suggest little lasting price weakness, and a general level prevailing above $70 over the remainder of the year."
What are the best stocks to buy to bet on the trend for firm oil prices? To decide, Peter Way looks at the buying patterns of market makers -- the big boys on the trading floor.
In addition, he notes positive market maker activity among oil exploration & production stocks. He explains, "With significant quantities of low-cost reserves already found, and prospects for additional finds tied up, these companies inevitably will get acquired by bigger producers whose customer demands exceed their yearly reserve findings."
MOST NOTEWORTHY: Citigroup (C), Altria Group, Inc (MO), and TreeHouse Foods Inc (THS) were today's notable upgrades:
Bank of America upgraded Citigroup Inc (NYSE: C) to Buy from Neutral with a $58 target to reflect the low valuation and the company's opportunities to increase earnings growth over the next year.
Altria Group (NYSE: MO) was added to Goldman Sachs' Conviction Buy List. The firm believes shares, excluding Kraft (KFT), could reach $76 over the next 12 months. Goldman also thinks Altria may announce a spinoff of its Philip Morris International unit this summer.
"It may have been a rough and tumble year for natural gas, but the market is coming back with a vengeance," says Kevin Kerr in his Marketwatch Global Resources newsletter.
The natural gas market has had "an extremely volatile 12 months of trading," he recalls. Both the Amaranth hedge fund trading debacle and the lack of hurricanes over the past season drove the prices to extreme lows.
Now, he says, "All that may be changing as wholesale prices soar." Indeed, natural gas has rallied to a two-month high, coincident with the cold froze in the northern U.S.
According to Kerr, the "Perma-bears" in the natural gas market are discounting the cold weather, stating that it is hitting late in the season. They also are leery of gas inventories that are 21% higher than the average for the past five years.
MOST NOTEWORTHY: HSBC Holdings Plc (HBC), Suncor Energy Inc (SU) and Apple Inc (AAPL) topped today's list of downgrades:
HSBC Holdings Plc (NYSE: HBC) was downgraded to Underweight from Neutral at JP Morgan, as the firm believes the loan loss from the U.S. mortgage business may be 20% worse than expected. They recommend investors to short HBC shares and use any rally to add short positions.
Suncor Energy Inc (NYSE: SU) was downgraded to Underperform from Market Perform at Freidman Billings, citing fair valuation, higher capital costs and downside potential from crude oil prices.
Apple Inc (NASDAQ: AAPL) was removed from Goldman Sachs' Conviction Buy List.
OTHER DOWNGRADES:
Roche Holdings (OTC: RHHBY) was downgraded to Neutral from Buy at UBS.
Pacer Int'l Inc (NASDAQ: PACR) was downgraded to Neutral from Outperform with a $33 target at Baird after the company's disappointing fourth-quarter report.
Baird downgraded Host Hotels & Resorts (NYSE: HST) to Neutral from Outperform on valuation.
Sina Corp (NASDAQ: SINA) was downgraded to Market Perform from Outperform at Piper Jaffray due to valuation after the company's solid quarter.
JP Morgan downgraded AK Steel Holding Corp (NYSE: AKS) to Neutral from Overweight as they believe an acquisition of the company is not likely imminent given recent insider selling.
Raymond James downgraded Time Warner Telecom Inc (NASDAQ: TWTC) to Outperform from Strong Buy.
Oppenheimer downgraded FMC Corp (NYSE: FMC) to Neutral from Buy.
AG Edwards downgraded Simon Property Group Inc (NYSE: SPG) to Hold from Buy on valuation.
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Waiting for the other shoe to drop: The looming credit crisis
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