Stocks start at ‘09 highs after the Dow gained for a sixth successive session on upbeat consumer confidence and housing data. Educator provider Corinthian Colleges (COCO) (+7.4%) enjoyed a Coco pop after earnings and closeout retailer Big Lots (BIG), benefiting perhaps from trading in odd lots, closed up 6.5%. Fannie (FNM) and Freddie (FRE) continued their tear, even as some say investing in such stocks is akin to buying a lottery ticket. (Speaking of, our Mega Millions failed to follow Italy’s lead and remained unclaimed last night).

Chicken Little still had a lot to chew over as the OMB raised its deficit estimate to $9 trillion over the next decade; that clock tolls for thee. The last liberal lion passed away on a day mathematicians just labeled the week’s most miserable. We’ll get reports on oil inventories, July new home sales and durable goods. See Two Ways: Durable Goods in the Spotlight.

Initiations

HealthSouth (HLS): Robert Baird researchers see HealthSouth shares heading north, initiating with an Outperform and $20 price target. Steady Medicare reimbursement rates and market share gains are cited.

Railroads: Baird’s been a busy bee, beginning coverage of rails Burlington Northern Santa Fe (BNI) (Outperform; $100 target), Norfolk Southern (NSC) (Neutral; $53) and Union Pacific (UNP) (Neutral; $72).

Cable Companies: JP Morgan picks up Comcast (CMCSA) ($19) and Time Warner Cable (TWC) ($45) with Overweights on each due to operational advantages over telecom.

Buffalo Wild Wings (BWLD): The restaurant chain may take flight after Jesup and Lamont began with a Buy ($49 price objective). BWLD should see good growth in new units, in contrast to peers. See today's Ticker Shock for more.

Upgrades

Diageo (DEO): No hangover at drinks outfit Diageo. Boosted by Bernstein yesterday, it’s upgraded at Morgan Stanley this morning. The rating is raised to Overweight (this is after all the maker of Guinness) from Equal-weight; emerging markets offer promise and channel checks suggest improving de-stocking trends should benefit the stock.

Affiliated Managers (ACS): Investors may want to be associated with Affiliated Managers after an upgrade to Outperform from Neutral at Credit Suisse. Accretive acquisitions could drive shares higher - the new price objective is $69.

General Maritime (GMR): The stock could keep its head above water after a valuation based ratings reset (Outperform from Market Perform; $9 target) from FBR.

Alcatel-Lucent (ALU): Natixis dials up a 180 degree upgrade on telecom equipment firm Alcatel-Lucent, boosting to Buy from Reduce.

Downgrades

American Woodmark (AMWD): Robert Baird throws the kitchen sink at kitchen cabinet company American Woodmark, whose earnings miss prompts a downgrade (Underperform from Neutral) and $5 price target cut (to $19).