General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F) and Chrysler CEOs will be back on Capitol Hill for a second day of testimony as they continue to press for a $34 billion government bailout. GM's Wagoner told lawmakers he would accept strict conditions, including a promise to return the money and file for bankruptcy if his company doesn't fulfill the terms. GM and Chrysler also said on Thursday they would be open to a merger if the U.S. government mandated it. On a lighter note, the auto industry bailout received support from an unlikely source -- Jon Stewart on The Daily Show explains why he supports it.
Boeing Co. (NYSE: BA) may again delay deliveries for the 787 Dreamliner at least six more months, according to a report in The Wall Street Journal. This would be the fifth delay and first deliveries of the jet may not occur until as late as summer 2010. BA shares traded 3% lower in premarket (8:06 am).
Microsoft Corp. (NASDAQ: MSFT) on Thursday named a former Yahoo! Inc. (NASDAQ: YHOO) executive, Qi Lu, to
the position of president of the online services group as it attempts to catch up to Google Inc. (NASDAQ: GOOG) on that front. Apparently, this appointment has been rumored for months. Also, a possible runner-up for the YHOO CEO position has moved to MSFT to head the company's advertiser and publisher solutions group. YHOO shares were 1.8% lower in premarket trade (8:07 am).
Jefferies upgraded shares of Red Hat (NYSE:RHT) to Buy from Hold after their checks indicated Red Hat's November quarter results will be in-line due to solid Jboss sales. The firm also believes a potential new partnership with Cisco (NASDAQ:CSCO) could provide share upside.
Barclays upgraded Amazon.com (NASDAQ:AMZN) to Overweight from Equal Weight as they believe the company's competitive position will strengthen during the current downturn and that the company will gain share.
JP Morgan upgraded YRC Worldwide (NASDAQ:YRCW) to Neutral from Underweight following the announcement that the company and the Teamsters will vote on contract modifications.
Del Monte Foods (NYSE:DLM) was raised to Overweight from Equal Weight at Stephens.
Thomson Reuters (NYSE:TRI) was upgraded at Morgan Stanley to Equal Weight from Underweight.
Reliant Energy (NYSE:RRI) was lifted to Outperform from Market Perform at Wachovia.
Analyst downgrades:
B. Riley downgraded shares of Hot Topic (NASDAQ:HOTT) to Neutral from Buy to reflect a lack of visibility into 2009 and valuation but raised their target price to $9.30 from $8.20.
Citigroup cut KLA-Tencor (NASDAQ:KLAC) to Hold from Buy to reflect their more offensive stance on the semi group as they view KLA-Tencor as a more defensive name. The firm lowered their target to $22 from $31.
KeyBanc downgraded Arch Chemicals (NYSE:ARJ) to Underweight from Hold citing global economic headwinds, the stronger dollar, pension costs, and continued weakness in North American housing, among other reasons.
Jo Ann Stores (NYSE:JAS) was cut to Hold from Buy at Soleil.
Calyon downgraded Schlumberger (NYSE:SLB) to Outperform from Buy.
Amdocs (NYSE:DOX) was downgraded to Neutral from Buy at Goldman.
Oppenheimer upgraded Genzyme (NASDAQ: GENZ) to Outperform from Perform on expectations that upcoming regulatory events, mainly approvals of Mozobil and 2,000L Myozyme, will serve as positive catalysts.
Ladenburg analyst Dick Bove raised Bank of New York (NYSE: BK) to Buy from Neutral as he now believes the Russian lawsuit is turning in the bank's favor and is no longer a significant risk.
Societe Generale upgraded UBS (NYSE: UBS) to Buy from Hold on valuation and the company's deal with the Swiss government.
Bed Bath & Beyond (NASDAQ :BBBY) was upgraded to Market Perform from Underperform at Friedman Billings.
RC2 Corp (NASDAQ: RCRC) was lifted at Wachovia to Outperform from Market Perform.
Cintas (NASDAQ: CTAS) was upgraded to Hold from Sell at Citigroup.
Research in Motion (NASDAQ: RIMM) is recently down $2.32 to $35 in pre-open trading. RIMM lowered Q3 earnings guidance. Deutsche Bank has a Sell rating on RIMM. RIMM December option implied volatility of 140 is above its 26-week average of 72 according to Track Data, suggesting larger price movement.
Motorola (NYSE: MOT) closed at $4.27. MOT overall option implied volatility of 95 is above its 26-week average of 69 according to Track Data, suggesting larger price movement.
Nokia (NYSE: NOK) closed at $13.64. NOK will host Capital Markets day in New York on December 4. Smith Barney says: "Margin targets to be lowered but how bad will 09 get?" NOK December option implied volatility of 84 is above its 26-week average of 61 according to Track Data, suggesting larger price movement.
Ericsson (NASDAQ: ERIC) is recently up 10 cents to $7 in pre-open trading. Cowen says: "Reducing global handset industry, Sony Ericsson, on further weakness." ERIC overall option implied volatility of 78 is above is 26-week average of 62 according to Track Data, suggesting larger price movement.
Apple (NASDAQ: AAPL) is recently down $2.27 to $89.70 in pre-open trading. Kaufman Bros says "Maintain Buy. We continue to believe AAPL is one of the better names to own in this tough economy given its strong fundamentals." AAPL overall option implied volatility of 74 is above its 26-week average of 56 according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
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.
Merrill downgraded Campbell Soup (NYSE: CPB) to Neutral from Buy and expects marketing and promotional spending to limit earnings growth in 2009 and 2010. The firm lowered their target to $35 from $42.
Mechel Steel (NYSE: MTL) was cut to Underweight from Equal Weight at Morgan Stanley to reflect declining coal demand.
Friedman Billings downgraded shares of Legg Mason (NYSE: LM) to Underperform from Market Perform on liquidity concerns given the Legg Mason's leveraged balance sheet and falling EBITDA. The firm lowered their target to $7 from $11.
Google (NASDAQ: GOOG) is recently down $2.44 to $255 in pre-open trading. Thomas Weisel has a $650 target on GOOG. Smith Barney has a $450 target price for GOOG. GOOG December option implied volatility of 87 is above its 26-week average of 50 according to Track Data, suggesting larger price movement.
Yahoo (NASDAQ: YHOO) closed at $10.21 Monday. Thomas Weisel has a 12-month target of $15 on YHOO. YHOO December option implied volatility of 112 is above its 26-week average of 66 according to Track Data, suggesting larger price movement.
Amazon.com (NASDAQ: AMZN) is recently down 20 cents to $42.30 in pre-open trading. Stanford Group says: "Initiate coverage of AMZN with a Sell rating and a $25 per share price target. We forecast revenue growth to decelerate materially in 2009 as retail sales declines worsen as inventory and pricing competition builds during a deep global recession." AMZN December option implied volatility of 93 is above its 26-week average of 62 according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Jefferies upgraded Buffalo Wild Wings (NASDAQ: BWLD) to Buy from Hold on valuation with the stock down 65% in two months as they believe the company has a "best-in-class fundamental story." The firm lowered its target to $25 from $30.
Morgan Stanley upgraded Sanofi-Aventis (NYSE: SNY) to Overweight from Equal Weight on valuation and believes near-term cost reductions could provide a positive catalyst.
Citigroup upgraded New York Times (NYSE: NYT) to Hold from Sell and lowered its target to $5.50 from $7 on valuation and believes the dividend cut will boost the company's liquidity.
Pantry (NASDAQL PTRY) was upgraded to Outperform from Market Perform at Friedman Billings.
LECG Corp (NASDAQ: XPRT) was raised to Buy from Neutral at UBS.
Thomson Reuters (NYSE: TRI) was upgraded at RBC Capital to Outperform from Sector Perform.
Analyst downgrades:
Jefferies downgraded Suntech (NYSE: STP) to Hold from Buy and lowered its target to $6 from $25 as they believe concerns about a convert refinancing in February 2010 will continue to weigh on the stock.
Credit Suisse cut Ericsson (NASDAQ: ERIC) to Underperform from Outperform due to expectations for a decline in wireless infrastructure spending.
ING downgraded shares of Rio Tinto (NYSE: RTP) to Hold from Buy as they believe it will be challenging for the company to execute asset sales planned at reducing debt in the current environment.
American Eagle (NYSE: AEO) closed at $7.52 Friday. AEO is scheduled to report Q3 EPS on November 25. RBC Capital Markets lowered its price target to $14 from $15. AEO December option implied volatility of 120 is above its 26-week average of 74 according to Track Data, suggesting larger price movement.
Dollar Tree (NASDAQ: DLTR) closed at $35.28 Friday. DLTR is scheduled to report Q3 EPS on November 25. Deutsche Bank has a Hold rating and a $35 price target on DLTR. DLTR December option implied volatility of 84 is above its 26-week average of 59 according to Track Data, suggesting larger price movement.
Williams-Sonoma (NYSE: WSM) closed at $4.84 Friday. WSM said W. Howard Lester, Chairman & chief executive, sold about 4.2 million shares between October 29 and November 21. Lester also sold WSN shares from October 13 & 14th to cover a margin calls. WSM is scheduled to report Q3 EPS on December 4. Thomas Weisel lowered its 12-month price target from $10 to $8. WSM December option implied volatility of 168 is above its 26-week average of 68 according to Track Data, suggesting larger price fluctuations.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Microsoft (NASDAQ: MSFT), Gap (NYSE: GPS) and Healthcare Services (HCSG) were today's noteworthy upgrades:
Oppenheimer upgraded shares of Microsoft (NASDAQ: MSFT) to Outperform from Perform on valuation as they see a trading opportunity following the recent sell-off. The firm established a $22 target on shares.
Citigroup upgraded Gap (NYSE: GPS) to Buy from Hold on its "solid" Q3 results and greater visibility. The firm lowered their target to $12 from $14.
William Blair upgraded shares of Healthcare Services (NASDAQ: HCSG) to Outperform from Market Perform to reflect the company's strong financial position and stable business outlook.
ARM Holdings (NASDAQ: ARMH) was upgraded to Buy from Neutral and added to the Conviction Buy List.
Intuit (NASDAQ: INTU) was raised to Buy from Sell at UBS.
Cyberonics (NASDAQ: CYBX) was lifted to Buy from Neutral at Piper Jaffray.
Analyst downgrades:
Baird downgraded Autodesk (NASDAQ: ADSK) to Neutral from Outperform and lowered its target to $20 from $31 following the company's weak Q4 guidance. Shares were also downgraded to Underperform from Buy at Merrill Lynch.
Friedman Billings downgraded shares of Goodrich (NYSE: GR) to Market Perform from Outperform as they do not expect a turnaround in the commercial aerospace stocks in the near term. The firm lowered their target to $46 from $83.
UBS cut VMware (NYSE: VMW) to Sell from Neutral and lowered its target to $15 from $21 following checks that indicate that consensus license growth expectations are too aggressive for Q4 and FY09.
Sunpower (NASDAQ: SPWRA) was lowered to Underperform from Neutral at Merrill Lynch.
Gen-Probe (NASDAQ: GPRO) was downgraded at Morgan Stanley to Equal Weight from Overweight.
Goldman removed Emulex (NYSE: ELX) from its Conviction Buy List.
Analyst initiations:
Google (NASDAQ: GOOG) was initiated at Merriman with Sell rating. Merriman's checks indicate the decline in consumer and business purchasing is having a dampening effect on search engine marketing. The firm sees downside risk to consensus estimates and recommends waiting for a better entry point. The firm thinks shares could reach $200 to $240 in the near-term.
Oppenheimer believes Cadence Pharmaceuticals (NASDAQ: CADX) is sufficiently capitalized to reach FDA approval of Acetavance and Omigard. Shares were initiated with an Outperform rating and $10 target.
William Blair believes Cisco (NASDAQ: CSCO) must evolve from selling pure infrastructure hardware to providing platforms with higher value and intelligence. The firm started shares with a Market Perform rating.
Societe General upgraded BASF AG (OTC: BASFY) to Buy from Hold. The firm believes the bad news is out and that BASF has a strong market position.
Pali Capital upgraded Hot Topic (NASDAQ: HOTT) to Buy from Neutral based on the ongoing merchandise catalyst, the opportunity to reclaim the mainstream kid and closing underperforming stores, which create the most favorable conditions in the last 5+ years.
Stanford upgraded L-1 Identity (NYSE: ID) to Buy from Hold on valuation, and the firm sees little risk to the company from the Obama Administration.
Gymboree (NASDAQ: GYMB) and Windstream (WIN) were raised to Overweight from Neutral at JP Morgan.
Doral Financial (NYSE: DRL) was upgraded at B. Riley to Buy from Neutral.
Alumina (NYSE: AWC) was upgraded to Buy from Neutral at UBS.
Analyst downgrades:
Credit Suisse downgraded Targanta (NASDAQ: TARG) to Underperform from Outperform following the FDA Panel's rejection of Oritavancin.
Citigroup downgraded BASF AG (OTC: BASFY) to Sell from Hold and sees no reason to own the stock following the company's profit warning. Shares were also downgraded at WestLB to Hold from Add.
Deutsche Bank downgraded shares of Amedisys (NASDAQ: AMED) to Hold from Buy and lowered its target to $53 from $75 on concerns over the company's deteriorating A/R aging trends.
VeriFone Holdings (NYSE: PAY) and Navios Maritime (NYSE: NMM) were lowered to Neutral from Overweight at JP Morgan.
NTT DoCoMo (NYSE: DCM) was downgraded at Citigroup to Hold from Buy.
Analyst initiations:
Needham expects shares of Cepheid (NASDAQ: CPHD) to be driven by continued market penetration in the hospital acquired infection market, new test introductions, GeneXpert Infinity sales, and molecular diagnostics growth from sales outside of traditional molecular testing areas. Shares were initiated with a Buy rating and $21 target.
Needham also initiated Gen-Probe (NASDAQ: GPRO) with a Hold rating and expects market share gains for the company when PANTHER is approved in 2010/2011.
William Blair believes Harbin Electric (NASDAQ: HRBN) is an "interesting" opportunity for exposure to rapid growth in infrastructure within the People's Republic of China. The firm started shares with a Market Perform rating.
Boston Scientific (NYSE: BSX) was initiated with a Buy rating and $11 target at UBS.
NutriSystem (NASDAQ: NTRI) was initiated with a Neutral rating at Janney Montgomery.
Ener1 (NYSE: HEV) was assumed at JMP Securities with an Outperform rating and $9 target.
Interesting article on Hewlett-Packard (NYSE: HPQ) beating Apple (NASDAQ: AAPL) to the "touch" with regard to providing a touch screen interface on a computer. It's certainly a worthwhile read. However, I've long commented on AAPL and its particular touch technology being infused into its computer lineup in some way. Laptops will likely be the first enabled. However, I'll take some assertions in the article to task.
While AAPL is known to be a first mover and always have that advantage, that's not always the case. I think it's more the fact that when the company does something it just executes so well and improves an existing product category so dramatically that people think it's a first mover product.
It certainly was very late entering the cellular market but did it spectacularly with a game changer. Portable music devices were around for years and the iPod was the ultimate game changer. In fact, the continued iPod dominance with this mature of a product is simply shocking. I could give more examples but the point is made.
UBS upgraded Pacific Sunwear (NASDAQ: PSUN) to Neutral from Sell and said liquidity is no longer a near-term concern. The firm lowered Pacific Sunwear's target to $1.50 from $3. Citigroup upgraded shares to Hold from Sell on valuation following the recent weakness and believes Pacific Sunwear has sufficient liquidity to remain a going concern.
Calyon believes Reliant Energy (NYSE: RRI) will be successful in unwinding the Merrill Lynch Retail credit sleeve and obtaining alternative collateral. The firm upgraded shares to Buy from Add.
JP Morgan said Cogent's (NASDAQ: COGT) position in homeland security and the defense markets make it less sensitive to an economic downturn, making valuation attractive. JP Morgan upgraded shares to Overweight from Neutral and raised its target to $13 from $10.50.
Goldman added Research in Motion (NASDAQ: RIMM) to its Conviction Buy List and removed Riverbed (NASDAQ: RVBD) from the Conviction Sell List.
J.M. Smucker (NYSE: SJM) was raised to Buy from Underperform at Merrill Lynch.
International Speedway (NASDAQ: ISCA), a promoter of motor sports entertainment, closed at $25.23 Tuesday. ISCA December option implied volatility of 58 is above its 26-week average of 34 according to Track Data, suggesting larger price movement.
PetsMart (NYSE: PETM), the operator of more than 1,075 pet stores, is scheduled to report Q3 EPS today. PETM closed at $15.06 Tuesday. PETM November 15 straddle is priced at $1.65, PETM December 15 straddle is priced at $3.40. PETM December option implied volatility is at 97: January is at 75; above its 26-week average of 56 according to Track Data, indicating larger near term movement.
First Solar (NYSE-FSLR) is recently down $6.56 to $104 in pre-open trading. Friedman Billings says: "Recent checks suggest that FSLR's new strategy in the U.S. market (entering the distributed, rooftop segment) is already facing headwinds." FSLR overall option implied volatility of 121 is above its 26-week average of 82 according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
US securities analysts have been encouraged not to rate every company they cover as a Buy. That may not be working even as earnings fall.
According to the FT, "Equity research departments around the world have become much more bearish since the start of the year, but US analysts remain markedly more bullish on stocks than peers elsewhere." Research quoted by the paper shows that only 6.7% of stocks covered by U.S. stock researchers rate a Sell.
The news is disturbing because positive ratings are one of the things that keep investors in stocks and analysts who are slow to cut their price targets and modify opinions are likely to cost shareholder money.
U.S. stock researchers have long believed that lowering ratings gives them less access to management. That is a poor excuse for being overly bullish on shares.
The investing public and press mock analysts who put Sell ratings on stocks after they have dropped 90%. It appears that those actions are built into the U.S. equity research system.
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Sean Udall is a 
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