Analyst Upgrades

• Disney (DIS) to buy from hold at Wunderlich.
• Pike Electric (PIKE) to outperform from market perform at FBR Capital.
• Kindred Healthcare (KND) to overweight from equal weight at Barclays.
• UBS (UBS) to hold from sell at Canaccord.
• Avery Dennison (AVY) and Take-Two (TTWO) to buy from neutral at BofA/Merrill.
• Mercer (MERC) to outperform from market perform at Raymond James.

Analyst Upgrades

• Exxon Mobil (XOM) and BB&T (BBT) to outperform from perform at Oppenheimer.
• D.R. Horton (DHI) upgraded to outperform from market perform at Wells Fargo.
• Meritage Homes (MTH), Old Dominion Freight (ODFL) and Heartland Payment (HPY) to outperform from market perform at Wells Fargo.
• Toll Brothers (TOL) to overweight from equal weight at Barclays.
• Hershey (HSY) to buy from neutral at Janney Capital.
• UnitedHealth (UNH), Cigna (CI) and Allscripts (MDRX) to buy from hold at Deutsche Bank.
• Nationwide Health (NHP) to outperform from market perform at JMP Securities.
• Reynolds American (RAI) to buy from neutral at UBS.
• Adtran (ADTN), PG&E (PCG) and Wisconsin Energy (WEC) to overweight from equal weight at Morgan Stanley.

Europe is suddenly almost an afterthought after two strong days in a row. A weaker jobs number was trumped by a higher market and commodities forecast from Goldman Sachs. Even a huge Madoff suit did not wreck the markets today. Here are today's unofficial closing bell levels:
DJIA: 11,362.41
NASDAQ: 2,579.35
S&P 500: 1,221.53

Top Analyst Upgrades/Downgrades

Aeropostale (ARO) had a disappointing same store sales figure reaction today and shares were down almost 14% at $23.07 right before the closing bell.

"Home Prices Are About to Bottom" was the headline for the Barron's cover story the week of July 14, 2008. The story explained that the housing market should level off in many areas of the country by the end of the year.

I have made some equally unfortunate prognostications in my tenure at BloggingStocks, so my purpose is not to poke fun at Barron's but to point out that here we are, over two years later, and it is still debatable whether the housing market has bottomed out.

Analyst Upgrades

• Jefferies upgraded Computer Sciences (CSC) to buy from hold and raised its target to $53 from $47. The analyst said Computer Sciences' valuation has created one of the best LBO opportunities in several years and could provide a five year IRR of 25+%.
• Keefe Bruyette upgraded Comerica (CMA) to outperform from market perform, citing strength of the company's capital. The firm raised its target for shares to $44 from $43.
• RBC Capital upgraded Nokia (NOK) to outperform from sector perform and raised its price target to $14 from $12. The firm upgraded shares based on valuation, reduced execution risk on software development, and potential catalysts from new devices based on Symbian^3. RBS upgraded Nokia to buy from hold after the company named Stephen Elop as CEO.
• Allstate (ALL) was upgraded to buy from hold at Citigroup.
• Coca-Cola Enterprises (CCE) was upgraded to buy from neutral at BofA/Merrill.
• Moody's (MCO) was upgraded to overweight from neutral at Piper Jaffray.

Stocks were indicated weak all morning after a miserable durable goods figure for July showed a large drop in many segments and after new housing sales were about as equally poor as yesterday's existing home sales. Nouriel Roubini even went as far as to call the double-dip recession being above a 40% chance now. Many stocks rallied after being lower all day, including many counter-intuitive sectors. Most likely that was a result of bottom fishing or bargain hunting. No more, no less.

Here were today's unofficial closing bell levels:

Dow Jones 10,060.06 +19.61 (0.20%)
S&P 500 1,055.33 +3.46 (0.33%)
Nasdaq 2,141.54 +17.78 (0.84%)

Bearish sentiment is nearly palpable as Toll Brothers (TOL) prepares to unveil its fiscal third-quarter results. Ahead of the open on Wednesday, Toll Brothers is expected to report a quarterly loss of 14 cents per share -- significantly improved from the homebuilder's year-ago deficit of $2.93 per share.

The company has a dismal track record in the earnings spotlight though, having fallen short of Wall Street's consensus expectations in three of the past four reporting periods. And, judging by recent increases in short interest and buy-to-open put volume, traders are bracing for another disappointing report from Toll Brothers.

Toll Brothers (TOL) closed down 50 cents to $16.60. TOL is expected to report Q3 EPS on August 25. September put option implied volatility is at 41, December is at 44; verses its 26-week average of 41, according to Track Data, suggesting non-directional near term price movement.

Delta Air Lines (DAL) closed down 58 cents to $10.78. WTI Crude Futures are recently down 1.35% to $74.40 according to Bloomberg. DAL call option volume of 11K contracts compares to put volume of 11K contracts. September put option implied volatility is at 52, December is at 57; near its 26-week average of 53 according to Track Data, suggesting non-directional price movement.

Update is by Stock Specialist Paul Foster of theflyonthewall.com

Toll Brothers (TOL - option chain) stock is traded lower Thursday after the company said in an update that it expects total net signed contracts in the third quarter of this year to be less than those signed in the previous quarter due to seasonal trends. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on TOL.

Thursday, TOL opened at $18.49. In early trading, the stock hit a high of $18.70 and a low of $17.78. As of 12:20, TOL was trading at $17.99, down $0.79 (-4.2%). The chart for TOL looks bullish and S&P gives TOL a positive 4 STARS (out of 5) buy ranking.

It looks like John Paulson wants to get ahead of the crowd. He and other large homebuilders are buying prime building lots in states like Arizona, Colorado and Nevada.

The big players like Lennar Corp (LEN), Standard Pacific Corp. (SPF), KB Home (KBH), DR Horton (DHI) and Toll Brothers (TOL) are all grabbing lots at bargain basement prices.

Analyst Upgrades

• Oppenheimer upgraded Home Depot (HD) to outperform from perform on expectations that comp sales growth in the home improvement retail sector will accelerate. The firm has a $37 price target for Home Depot shares. The firm also reiterates an outperform rating on Lowe's (LOW).
• UBS upgraded Mattel (MAT) to buy from neutral, citing solid demand in core brands, strong free cash flow and improved cost structure, among other reasons. The firm raised its target to $26 from $21.
• Thomas Weisel upgraded Dreamworks (DWA) to overweight from market weight, citing upcoming releases and increased international expectations. The firm raised its target to $47 from $40.
• TD AmeriTrade (AMTD) was upgraded to outperform from market perform at FBR Capital.
• Whole Foods (WFMI) was upgraded to overweight from neutral at JPMorgan.
• Whiting Petroleum (WLL) was upgraded to overweight from equal weight at Barclays.

Analyst Upgrades

• ThinkEquity upgraded Intel (INTC) to buy from hold and has a $25 target on the stock. The firm believes guidance will prove conservative and strong execution, new product cycle, Win7 cycle and corporate PC-Server refresh will drive shares higher.
• Wells Fargo upgraded Holly Energy (HEP) to outperform from market perform after increasing its valuation ranges for small cap pipeline MLPs. The firm raised its valuation range for Holly to $43 to $45.
• SunTrust upgraded Watsco (WSO) to buy from neutral as it believes the carrier joint venture will serve as a long-term catalyst. The firm has a $67 price target on the stock. William Blair upgraded Watsco to outperform from market perform ahead of the company's Q4 results to reflect valuation and improving economic conditions.
• Staples (SPLS) and Office Max (OMX) were upgraded to overweight from neutral at JPMorgan.
• Kellogg (K) was raised to buy from neutral at BofA/Merrill.
• Advanced Micro (AMD) was upgraded to outperform from market perform at FBR Capital.

Analyst Upgrades

• Citigroup upgraded PPG Industries (PPG) to buy from hold on expectations the company will benefit from increased auto production in 2010. The firm raised its price target on shares to $71 from $62.
• Stephens upgraded H&R Block (HRB) to overweight from equal weight as it believes the company is well positioned to gain market share with the problems at Jackson Hewitt (JTX). The firm raised its target price on H&R Block shares to $28 from $22.
• Credit Suisse raised Tyson Foods (TSN) to outperform from neutral and raised its target to $16 from $13. The firm believes Tyson is a cyclical stock in the early stages of a rebound in protein processing.
• Lennar (LEN) was upgraded to overweight from equal weight at Barclays.
• Chipotle Mexican Grill (CMG) was upgraded to market perform from underperform at Wells Fargo.
• Spartech (SEH) was upgraded to buy from hold at KeyBanc.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Aeropostale Inc. (ARO) strong Q3 results topped analysts expectations, and it offered Q4 earnings guidance.
• Cascade Corp. (CASC) reported a surprise Q3 profit but lower revenue fell short of expectations.
• Collective Brands Inc. (PSS) reported strong Q3 earnings as well as same-store sales growth.
• Cost Plus Inc. (CPWM) narrowed its net loss in Q3 but revenue and same-stores sales declined.
• Del Monte Foods Co. (DLM) posted strong Q2 results and raised its earnings outlook for the full year.
• Diamond Foods Inc. (DMND) posted better-than-expected Q1 earnings, but said that revenue declined.

Cost Plus Inc. (CPWM) reported Thursday that its net loss from continuing operations for the third quarter of fiscal 2009 came to $22.3 million, or $1.01 per share, compared to a net loss of $24.0 million, or $1.09 per share, last year. Analysts surveyed by Thomson Reuters had expected a loss of $1.10 per share. Cost Plus also said net sales for the quarter totaled $181.9 million, a 10.4% decrease from the year-ago period. Same store sales for the quarter decreased 9.1% due in part to lower furniture sales and a relatively flat customer count.

Diamond Foods Inc. (DMND) reported a record profit of $0.88 per share for the first quarter of fiscal 2010. That was 38% higher than a year ago and topped the analysts' consensus forecast of $0.81 per share. Net sales for the quarter came to $180.6 million, 8% lower than in the prior year, due in part to a late walnut crop harvest. Diamond's forecast for the fiscal year are EPS of $1.72 to $1.82 and revenue of $585 million to $605 million, which is in line with analysts' expectations.