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Laurie Pasternack
New York - http://www.theflyonthewall.com

Laurie Pasternack is an Associate Editor at financial news site Theflyonthewall.com. She has a BA in English Literature from Binghamton University.

Laurie Pasternack
New York - http://www.theflyonthewall.com

Laurie Pasternack is an Associate Editor at financial news site Theflyonthewall.com. She has a BA in English Literature from Binghamton University.

Analyst upgrades:

• Friedman Billings upgraded Synovus (NYSE: SNV) to Market Perform from Underperform on valuation following the recent weakness. BASF (OTC: BASFY) and Akzo Nobel (OTC: AKZOY) were upgraded to Buy from Neutral at UBS on valuation and believes cash flows can cover the company's dividend.
• JP Morgan upgraded H.B. Fuller (NYSE: FUL) to Overweight from Neutral citing benefits from lower raw material costs.
• CA, Inc (NASDAQ: CA) was added to Goldman's Conviction Buy List.
• Goldman removed Boeing (NYSE: BA) from the Conviction Sell List.
• WABCO Holdings (NYSE: WBC) was upgraded to Buy from Hold at KeyBanc.

• Oppenheimer downgraded Giant Interactive (NYSE: GA) to Perform from Outperform following the company's Q3 results as they believe a recovery of revenue from ZT Online will take longer than expected.
• Friedman Billings cut Walter Industries (NYSE: WLT) to Market Perform from Outperform as they believe the decline in steel demand will pressure met coal prices. The company's target was lowered to $30 from $53.
• Citigroup downgraded shares of Atlas Pipeline (NYSE: AHD) Holdings to Sell from Hold as they believe the company could potentially be in violation of its debt covenants as early as Q1. The company's target was lowered to $4 from $31.
• Oracle (NASDAQ: ORCL) was removed from Goldman's Conviction Buy List.
• Dover (NYSE: DOV) and Emerson Electric (NYSE: EMR) were downgraded to Underweight from Neutral at JP Morgan.

Analyst upgrades:

• Calyon upgraded major network carriers based on falling oil prices and capacity cuts. The analyst is positive over the next 12 months but cautious short-term given the uncertain economy, and volatile markets and oil prices. AMR Corp (NYSE: AMR) and Delta Air (NYSE: DAL) were upgraded to Add from Neutral and UAL Corp (NASDAQ: UAUA) was raised to Neutral from Reduce.
• Ryanair (NASDAQ: RYAAY) was upgraded at Citigroup to Buy from Hold.
• Boardwalk Pipeline (NYSE: BWP) was raised to Buy from Hold at Deutsche Bank.
• Cowen lifted Biogen Idec (NASDAQ: BIIB) to Outperform from Neutral.
• JP Morgan upgraded Choice Hotels (NYSE: CHH) to Neutral from Underweight following the better-than-expected Q3 report.
• Oppenheimer upgraded shares of Integra LifeSciences (NASDAQ: IART) to Outperform from Perform on valuation, the company's minimal exposure to economic conditions, and expectations for margin improvement and a rebound in organic growth.

• Sherwin-Williams (NYSE: SHW) and AerCap Holdings (NYSE: AER) were downgraded to Neutral from Overweight at JP Morgan.
• UBS downgraded Embarq (NYSE: EQ) to Neutral from Buy following the CenturyTel (NYSE: CTL) merger announcement.

Analyst upgrades:

• PepsiCo (NYSE: PEP) was upgraded to Buy from Hold at Deutsche Bank.
• Fortress (NYSE: FIG) was upgraded at Citigroup to Hold from Sell.
• Prudential (NYSE: PUK) was lifted to Overweight from Neutral at JP Morgan.
• Keefe Bruyette upgraded Franklin Resources (NYSE: BEN) to Outperform from Market Perform and added shares to their Best Ideas List on valuation as they see an attractive risk/reward at current levels.
• UBS upgraded ASML Holding (NASDAQ: ASML) to Buy from Neutral on valuation as they believe the company remains a market leader.
• Oppenheimer raised Seattle Genetics (NASDAQ: SGEN) to Outperform from Perform on valuation following the recent weakness as they expect positive clinical news flow beginning in December.

• UBS downgraded U.S. Steel (NYSE: X) to Sell from Buy and lowered its target to $30 from $60 citing deteriorating U.S. conditions and concerns about the company's high fixed costs in a falling steel price environment.
• Royal Dutch Shell (NYSE: RDS.A) was downgraded to Underperform from Neutral at Credit Suisse.
  
• China Unicom (NYSE: CHU) was lowered to Underweight from Neutral at JP Morgan.

Analyst upgrades:

• Keefe Bruyette upgraded shares of Colonial Bancgroup (NYSE: CNB) to Outperform from Market Perform on valuation following the recent weakness and believes the company will be eligible to receive TARP funds. Morgan Stanley believes the company's valuation adequately reflects risk to the loan portfolio; the firm raised shares to Equal Weight from Underweight.
• Merrill upgraded Ericsson (NASDAQ: ERIC) and ASML Holding (NASDAQ: ASML) to Buy from Underperform and believes their valuation reflects the worst-case for bad news.
• Oppenheimer upgraded Trimble Navigation to Outperform from Perform on valuation as they believe the company's long-term growth story is intact.
• Celestica (NYSE: CLS) was upgraded to Sector Outperformer from Sector Performer at CIBC.
• KeyCorp (NYSE: KEY) was added to Goldman's Conviction Buy List.
• Wachovia raised EastGroup Properties (NYSE: EGP) to Outperform from Market Perform.

• UBS cut Barclays (NYSE: BCS) to Neutral from Buy as they believe capital raises could negatively impact earnings and that the dividend is likely to be cut.
• JP Morgan downgraded Discovery Holdings (NASDAQ: DISCA) to Underweight from Neutral based on valuation and the deteriorating economic outlook.
• Friedman Billings downgraded shares of Janus Capital (NYSE: JNS) to Underperform from Market Perform and lowered its target to $7 from $23 as they see further risk to the downside following the company's weaker-than-expected results.
• LKQ Corp (NASDAQ: LKQX) was cut to Sector Perform from Outperform at RBC Capital.
• Affymetrix (NASDAQ: AFFX) was lowered to Sell from Hold at Deutsche Bank.
• RightNow Tech (NASDAQ: RNOW) was downgraded at Baird to Neutral from Outperform.

Analyst upgrades:

• Keefe Bruyette upgraded shares of AllianceBernstein (NYSE: AB) to Outperform from Market Perform as they find AB's risk/reward attractive given its attractive long-term business model. Wachovia upgraded Watson Pharma (NYSE: WPI) and Teva Pharma (NASDAQ: TEVA) to Outperform from Market Perform citing valuations and positive drivers for generics that include patent expirations and market share expansion.
• UBS raised Lloyds TSB Group (NYSE: LYG) to Neutral from Sell on expected pricing power following the HBOS (OTC: HBOOY) acquisition.
• Otter Tail (NASDAQ: OTTR) was upgraded to Outperform from Neutral at Baird.
• GFI Group (NASDAQ: GFIG) was upgraded at Citigroup to Hold from Sell.
• Merrill upgraded Logitech (NASDAQ: LOGI) to Neutral from Underperform.

• JP Morgan downgraded shares of Lloyds TSB Group to Underweight from Neutral on capital concerns and believes the HBOS acquisition is not in the best interest of shareholders.
• Stephens downgraded Universal Truckload (NASDAQ: UACL) to Equal Weight from Overweight on valuation and concerns about a slowdown in the flatbed sector. The firm's target remains $28.

Analyst upgrades:

• Wachovia upgraded shares of The Goldman Sachs Group Inc (NYSE: GS) to Outperform from Market Perform on expectations for greater pricing power given Goldman's position as the largest remaining independent securities firm.
• Keefe Bruyette upgraded Investment Technology Group Inc (NYSE: ITG) to Outperform from Market Perform as they believe the company will take market share with the reshaping of the large wire-house brokerage community. The company's target was raised to $37 from $33.
• Broadpoint raised Hoku Scientific Inc (NASDAQ: HOKU) to Buy from Neutral as they believe the contract with Tianwei New Energy reduces financing risk.
• ACE Ltd (NYSE: ACE) and The Travelers Companies Inc (NYSE: TRV) were upgraded to Buy from Neutral at Goldman.
• Axcelis Technologies Inc (NASDAQ: ACLS) was upgraded to Buy from Hold and Evergreen Solar Inc (NASDAQ: ESLR) was lifted to Hold from Sell at Citigroup.

Analyst downgrades:

MAJOR PAPERS:

• The Wall Street Journal's "Smartmoney Stock Screen" looks at eight companies whose valuations make them ripe to buy, and they also may be in the sites of corporate buyers. The big eight include Asbury Automotive Group Inc (NYSE: ABG), Crane Company (NYSE: CR), Scholastic Corporation (NASDAQ: SCHL) and The Scotts Miracle-Gro Company (NYSE: SMG).
• The Wall Street Journal's Walter Mossberg said in the "Personal Technology" column that he cannot recommend Apple Inc's (NASDAQ: AAPL) MobileMe, as it has "too many flaws to keep its promises".
• The Wall Street Journal also speculated that the collapse this week of SemGroup LP, which is the parent of SemGroup Energy Partners LP (NASDAQ: SGLP), may have played a role in the 14% drop in crude oil over the past 10 days.
• In a move that could take advantage of the gap in the financing markets, The Goldman Sachs Group Inc (NYSE: GS) raised $10B to invest in loans backing leveraged buyouts. The fund will reportedly buy senior loans, the Financial Times reported.

• Former American International Group Inc (NYSE: AIG) chief Hank Greenberg is reportedly in settlement talks with New York Attorney General Andrew Cuomo over charges that Greenberg improperly inflated corporate books to show improved profits, the New York Post said.

MAJOR PAPERS:

• The Wall Street Journal's "Fund Track" reported that some banks struggling to raise capital may sell their money management units. National City Corporation (NYSE: NCC) is selling its Allegiant Funds, Fifth Third Bancorp (NASDAQ: FITB) is considering selling its Fifth Third Asset Management, and KeyCorp (NYSE: KEY) will possibly sell its Victory Capital Management unit.
• The Wall Street Journal also reported that Andrew Cuomo, the New York state Attorney General, is preparing to file civil securities-fraud charges against UBS AG (NYSE: UBS), possibly as early as this week. Sources said the lawsuit may include allegations of malfeasance by senior UBS executives.

• Bloomberg reported that money manager John Paulson, the owner of Paulson & Co., is launching a hedge fund that will provide capital to financial firms which have been damaged by the housing crisis. Paulson, who wants to open the fund by December, used bets against the U.S. housing market to help him earn $3.7B in 2007.
• After U.S. lawmakers reached a deal on legislation to alleviate the housing recession, the House of Representatives will today vote on a rescue plan for Fannie Mae -- Federal National Mortgage Association (NYSE: FNM) -- and Freddie Mac -- Federal Home Loan Mortgage Corporation (NYSE: FRE). Representative Barney Frank said that the package, which increases the likelihood Treasury Secretary Henry Paulson will get the authority to inject capital into the two, is "fully acceptable," Bloomberg reported.
• Oil trading losses forced SemGroup LP, which used to be America's 12th largest private company, to declare bankruptcy yesterday. Reuters noted that SemGroup LP's parent company is SemGroup Energy Partners LP (NASDAQ: SGLP).

MAJOR PAPERS:

• The books of Fannie Mae -- Federal National Mortgage Association (NYSE: FNM) -- and Freddie Mac -- Federal Home Loan Mortgage Corporation (NYSE: FRE) -- are being examined by the Federal Reserve and the Office of the Comptroller of the Currency to review their financial condition, according to the Wall Street Journal.
• The Wall Street Journal also reported that the Chevy Volt, an electric car from General Motors Corporation (NYSE: GM), is slated to roll out in two years and it received a major boost from 36 utilities that operate in 40 states who agreed to work together to make the plug-in vehicle possible. Among the utilities are American Electric Power Company Inc (NYSE: AEP), Consolidated Edison Inc (NYSE: ED), Duke Energy Corporation (NYSE: DUK), and Edison International (NYSE: EIX).
• Struggling mortgage lender Paragon is reportedly in talks with The Blackstone Group LP (NYSE: BX) about a potential takeover by Blackstone, the Financial Times reported.

• The New York Times reported that TiVo Inc (NASDAQ: TIVO) will today introduce a "product purchase" feature in partnership with Amazon.com Inc (NASDAQ: AMZN). Under TiVo's plan, the television remote control will be turned into a tool for buying products that are advertised and promoted on talk shows and commercials.

MAJOR PAPERS:

• People with the matter said that Ken Wilson, The Goldman Sachs Group Inc's (NYSE: GS) most senior financial-institutions broker, will temporarily exit the firm, the Wall Street Journal reported, in an effort to advise Treasury Secretary Henry Paulson on how to resolve the country's banking crisis.
• The American Federation of State, County, and Municipal Employees, a union with a stake in Citigroup Incorporated (NYSE: C) called for the financial services company to break itself up. The Financial Times reported that the demand will almost definitely be rejected by Citigroup.

• Treasury Secretary Henry Paulson's plan for rescuing Federal National Mortgage Association (NYSE: FNM) -- Fannie Mae -- and Federal Home Loan Mortgage Corporation (NYSE: FRE) -- Freddie Mac -- calls for the creation of a new regulatory agency that would seek to assert more stringent control over the banks and lessen the damage they could cause to the American financial system, the New York Times reported.
• The Daily Telegraph reported that BP Plc (NYSE: BP) blocked a $1.8B dividend payment to its Russian partners in the TNK-BP joint venture.

• According to paidContent.org, now that its cash on hand exceeds its market cap, speculation that Napster Inc (NASDAQ: NAPS) could be a takeover target heated up.

MAJOR PAPERS:

• According to people familiar with the matter, the Wall Street Journal reported that Federal Hole Loan Mortgage Corporation (NYSE: FRE) --Freddie Mac -- is considering raising capital by selling up to $10B in new shares to investors. The sources believe this effort may have the potential to avoid a full-blown government rescue.
• The Wall Street Journal also reported that, amid U.S. investigations into allegations it helped American clients evade taxes, UBS AG (NYSE: UBS) said some Swiss-based private bankers will stop offering American clients Swiss bank accounts and other services.
• Starbucks Corporation (NASDAQ: SBUX) will close store in 44 states plus the District of Columbia, including 88 closures in California, 59 in Florida and 57 in Texas, the Wall Street Journal reported.

• After Cleveland Cliffs Inc (NYSE: CLF) bought Alpha Natural Resources Inc (NYSE: ANR), there may be many more acquisitions in the coal industry, Bloomberg said.
• Reuters noted that, according to a person with knowledge of the plans, Yahoo! Inc (NASDAQ: YHOO) could renew talks over News Corporation's (NYSE: NWS) Web properties if Microsoft Corporation (NASDAQ: MSFT) gets in the way of discussions with Time Warner Inc's (NYSE: TWX) AOL. Yahoo! is in contact with News Corp. about the assets, but the search engine's talks with Time Warner about AOL are more advanced, the source added.
  

MAJOR PAPERS:

• The Wall Street Journal reported that it is the Bush Administration versus Democrats versus Republicans to decide the strategy to stabilize Federal National Mortgage Association (NYSE: FNM) -- Fannie Mae -- and Federal Home Loan Mortgage Corporation (NYSE: FRE) -- Freddie Mac. The Administration's plan would let the Treasury Department advance a credit line and the opportunity for the government to buy equity in either firm. A package is expected to pass but not before the political and economic ramifications are battled out. Democrats and Treasury want it to be a part of a housing rescue plan; Republications oppose it.
• The Clinton Foundation, headed by former President Clinton, believes it has a pricing agreement in place that it expects will make malaria drugs affordable and available to millions of poor people worldwide, the Wall Street Journal reported.
• The Financial Times reported that UBS AG (NYSE: UBS) and Liechtenstein's LGT Group will today be accused by U.S. Congressional investigators of using the "cloak of bank secrecy laws" to help American clients evade billions of dollars in taxes.

• Globes reported that Teva Pharmaceutical Industries Limited (NASDAQ: TEVA) is talks to acquire Barr Pharmaceuticals Inc (NYSE: BRL). The price tag is said to be between $7B and $7.5B.

MAJOR PAPERS:

• People familiar with the issue said that European regulators are gearing up to file new antitrust charges against Intel Corporation (NASDAQ: INTC). The charges, the Wall Street Journal reported, would allege Intel gave major European retailers an incentive not to sell computers that use Advanced Micro Devices Inc (NYSE: AMD) chips.

• The New York Times reported that News Corporation's (NYSE: NWS) New York Post and The Daily News, owned by Mortimer Zuckerman, are exploring a print pact and have been in talks to find ways to combine some business functions of the papers, according to people briefed on the matter.
• According to sources, the San Francisco Business Times reported that Washington Mutual Incorporated (NYSE: WM) may be planning more layoffs in September. It is unclear how many employees will be affected and from which departments.

• In an effort to preserve capital, data compiled by Bloomberg showed that troubled mortgage companies Federal National Mortgage Association (NYSE: FNM), or Fannie Mae, and Federal Home Loan Mortgage Corporation (NYSE: FRE), or Freddie Mac, may cut dividends after more than $11B in combined losses since last year.
• Three people familiar with the matter said that the SEC subpoenaed Wall Street investment banks including The Goldman Sachs Group Inc (NYSE: GS), Deutsche Bank AG (NYSE: DB) and Merrill Lynch & Co Inc (NYSE: MER) in its hunt and crack down on suspected manipulation of Bear Stearns and Lehman Brothers Holdings Inc (NYSE: LEH) shares. Bloomberg reported that two of the people said the SEC, which yesterday curtailed short selling in financial stocks, is looking for e-mails and trading records and is also examining whether securities firms have "adequate controls" to deal properly with misconduct.

MAJOR PAPERS:

• The market for private mortgage insurance has narrowed and is tougher to obtain, further pressuring home buyers and affecting the market, the Wall Street Journal reported. "Clearly, the pendulum had swung a little too far in terms of flexibility in underwriting," said Len Sweeney, the chief risk officer at AIG United Guaranty, a part of American International Group Inc (NYSE: AIG).
• In a agreement with Viacom Inc (NYSE: VIA), Google Inc (NASDAQ: GOOG) said it will remove visitor data from YouTube before it fulfills a judge's order to send data to Viacom, as a part of a larger copyright lawsuit, the Wall Street Journal reported.

• As part of its effort to emerge from bankruptcy protection, the Detroit News reported that Delphi Corp (OTC: DPHIQ) announced plans to sell its brake business. Delphi has retained W.Y. Campbell and Co to help sell the unit, which has around 1,000 employees worldwide.
• The New York Post learned that Dick Fuld, the CEO of Lehman Brothers Holdings Inc (NYSE: LEH), is seriously considering ways to take the company private. The Post said that talks centering on the privatization of Lehman have "gotten very serious consideration," according to sources, although details on how a maneuver may work remain unclear.

MAJOR PAPERS:

• The Wall Street Journal reported that worries are deepening among regulators, executives and consumers about the U.S. banking industry following the federal government's seizure of IndyMac Bancorp Inc (NYSE: IMB).
• According to a person familiar with the situation, the Wall Street Journal reported that Banco Santander SA (NYSE: STD) is nearing an agreement to buy Alliance & Leicester for around $2.38B.

• Yahoo! Inc (NASDAQ: YHOO) chairman Roy Bostock called Microsoft Corporation's (NASDAQ: MSFT) proposal "ludicrous". Bostock said that "while this type of erratic and unpredictable behavior is consistent with what we have come to expect from Microsoft, we will not be bludgeoned into a transaction that is not in the best interests of our stockholders." Yahoo reaffirmed that it is open to a sale of the company for $33 a share, the New York Times reported.

• CNet reported that the price of the Xbox 360 Pro model with a 20GB hard drive was cut by Microsoft to $299 from $349. The company also introduced introduced a 60GB model to go on sale in the U.S. and Canada in August for $349.