United Technologies (NYSE: UTX) made a proposal to acquire all outstanding shares of Diebold (NYSE: DBD) for $40 per share in cash.

DBD manufactures, installs and services automated self service transaction systems.

DBD March option implied volatility was at 40, April at 36; above its 26-week average 33 of according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

MOST NOTEWORTHY: Palm (PALM), Fuel Tech (FTEK), Weyerhaeuser (WY), and John Wiley & Sons (JW.A) were today's noteworthy upgrades:

• Palm Inc (NASDAQ: PALM) was upgraded to Outperform from Market Perform by Morgan Keegan, who expects PALM's recapitalization to bring more financial discipline, better growth from new products, and views the valuation as compelling.
• FuelTech Inc (NASDAQ: FTEK) was upgraded to Buy from Accumulate at ThinkEquity, which believes the company technologies are well-positioned as the U.S. Clean Air Act takes effect.
• Bank of America upgraded Weyerhaeuser Company (NYSE: WY) to Buy from Neutral, citing valuation and their prediction that the company's restructuring will create value for shareholders.
• John Wiley & Sons Inc (NYSE: JW.A) was upgraded to Buy from Hold by Stifel Nicolaus & Co, which views the company as a consistent performer with emerging catalysts and reasonable valuation.

OTHER UPGRADES:

• Circuit City Stores Inc (NYSE: CC) was added to the SMid Money List at JP Morgan.
• Fifth Third Bancorp (NASDAQ: FITB) was upgraded to Market Perform from Underperform at Keefe Bruyette & Woods.
• United Technologies Corporation (NYSE: UTX) was upgraded to Outperform from Market Perform by Bernstein.
• BreitBurn Energy Partners LP (NASDAQ: BBEP) was upgraded to Buy from Hold by AG Edwards.

MOST NOTEWORTHY: Four analog semiconductors, Archer Daniels Midland Co (ADM) and United Technologies Corp (UTX) were today's more noteworthy initiations:

• Bear Stearns initiated Analog Devices, Inc (NYSE: ADI) and National Semiconductor Corp (NYSE: NSM) with Outperform ratings and Linear Technology Corp (NASDAQ: LLTC) and Maxim Integrated Products Inc (NASDAQ: MXIM) with Peer Perform ratings.

• Archer Daniels Midland Co (NYSE: ADM) was initiated with a Neutral rating at Banc of America based on expected declines in ethanol margins. JP Morgan started shares with an Overweight rating.

• United Technologies (NYSE: UTX) was started with a Strong Buy rating at Matrix USA with a $90 intrinsic value...

OTHER INITIATIONS:

• CIBC initiated Quest Software, Inc (NASDAQ: QSFT) with a Sector Performer rating.

• Credit Suisse reinstated shares of Regal Entertainment Group (NYSE: RGC) with an Outperform rating.

• Merrill Lynch started BigBand Networks, Inc (NASDAQ: BBND) with a Neutral rating, ThinkEquity started shares with an Accumulate rating and $19 target, Jefferies started them with a Buy rating and Cowen started shares with an Outperform rating.

• RBC Capital initiated shares of Sunstone Hotel Investors, Inc (NYSE: SHO) with an Outperform rating.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Dell Inc (DELL), JetBlue Airways Corp (JBLU), Time Warner Inc (TWX) and Spectrum Brands, Inc (SPC) were some of today's notable upgrades.

• Goldman Sachs upgraded Dell Inc (NASDAQ: DELL) to Buy from Neutral with a $28 target to reflect the potential for buyback as well as other growth steps in the company's turnaround efforts.

• JetBlue Airways Corp (NASDAQ: JBLU) was upgraded to Neutral from Reduce at UBS.

• Time Warner Inc (NYSE: TWX) Inc was upgraded to Outperform from Peer Perform at Bear Stearns.

• Prudential upgraded Spectrum Brands Inc (NYSE: SPC) to Neutral from Underweight with a $5 target on valuation.

OTHER UPGRADES:

• United Technologies Corp (NYSE: UTX) was upgraded to Outperform from Neutral with a $79 target at Credit Suisse as the firm believes management can achieve better results across the company's commercial business.

• JP Morgan upgraded Applied Biosystems, Inc (NYSE: ABI) to Neutral from Underweight.

• Matrix USA upgraded Realnetworks, Inc (NASDAQ: RNWK) to Buy from Hold on valuation.

• Calyon upgraded Red Lion Hotels Corp (NYSE: RLH) to Add from Neutral with a $14 target.

• Prudential upgraded PDL BioPharma Inc (NASDAQ: PDLI) to Overweight from Neutral with a $28 target.

• Citigroup added Caterpillar Inc (NASDAQ: CAT) to its Recommended List.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).