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Upgrades & Downgrades: Going Palm's Up

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Maybe the experts know something we don't know.

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From Wall Street to the Great Wall summits are suddenly in fashion. After the S&P 500 climbed to close above 1100 for the first time in over a year and the Dow scaled a fresh 13-month peak, the Presidents of China and America met in Beijing. With the world wondering "who's on first?" apparently Hu's on second place in a poll of the powerful, as Obama may have mentioned at their pow-wow. Meanwhile, turning back Time (Warner) (TWX) to 1999 continues apace; twenty four hours after a date was announced for AOL's divorce, tonight's TV sees the return of Amanda's marriage made in heaven with Melrose Place.

SEC filings revealed Warren Buffett effectively doubled his Omaha stake in Walmart (WMT) to 37.8 million shares. Clearly the investment oracle intends to praise the world's largest retailer, not to bury it -- even as the company now offers customers the opportunity to order coffins online. In economics, at 8:30AM Eastern headline October producer prices rose a less than anticipated 0.3% while the core rate surprisingly slipped 0.6%. Data on industrial production and capacity utilization are released at 9:15AM. Earnings announcements include Autodesk (ADSK), and Salesforce.com (CRM).

Initiations

Dell (DELL): Morgan Stanley resumes Dell at Equal Weight.

Boston Scientific (BSX): The medical device maker is initiated at Hold by Morgan Joseph. While turnaround hopes are up on a new management team, shares are seen as fully valued.

Rino International (RINO): The stock is begun with a Buy at Canaccord Adams.

Netflix (NFLX): Collins Stewart starts Netflix at Buy ($73 price objective). Advantages of streaming are under-appreciated and kiosk risk overblown, the broker believes. For more on video rentals, see Blockbuster's Busted Plan.

Lear Corp. (LEA-WI): JP Morgan assumes coverage of Lear Corp with a recommendation of Overweight.

Miscellaneous: Jefferies picks up W.R. Grace (GRA) (Hold; $27 target price) and Donaldson Company (DCI) (Buy; $47). For the former, catalysts are seen in short supply while more robust truck order patterns could lift upcoming earnings with the latter.

Tim Hortons (THI): Dollars to donuts for tasty treat titan Tim Hortons, begun at Buy with a $38 target Jesup and Lamont. Canada's restaurant industry represents a compelling long-term growth opportunity for the firm. See also The Tragedy of Krispy Kreme.

Upgrades

Palm (PALM): Kaufman Bros upgrades Palm to Buy from Hold on an improved risk-reward profile.

Exxon Mobil (XOM): Barclays upgrades Exxon Mobil to Overweight from Equal-weight and raises their target to $92 from $90. For more, read What Shell, Exxon Results Say About Oil Prices.

Brinker International (EAT): The restaurant stock is upgraded to Strong Buy from Outperform at Raymond James.

Alkermes (ALKS): The stock is increased Outperform from Market Perform at Leerink Swann in light of its positive Phase III results from the Vivitrol opioid dependence trial. For more on the pharmaceutical sector, see Glaxo and Nabi Team Up for Nicotine Vaccine.

Energy Stocks: In the energy space, UBS is upgrading Hess Corp (HES) and National Fuel Gas (NFG), both now Buy from Neutral.

Devon Energy (DVN): Wells Fargo raises its Devon Energy rating (Outperform from Market Perform).

Barclays (BCS): Nomura boosts Barclays to Buy from Neutral.

Illinois Tool Works (ITW): UBS takes Illinois Tool Works to Buy from Neutral.

Microsoft (MSFT): UBS adds Microsoft to its list of top tech names, while removing Hewlett-Packard (HPQ). See also HP's Deal With 3Com Was Behind the Curve.

Downgrades

Joy Global (JOYG): Frowns for Joy Global, which gets a Neutral-from-Buy cut at UBS.

Sunpower (SPWRA): The solar stock is downgraded to Market Perform from Outperform at Raymond James.

BT Group (BT): JP Morgan hangs up on BT Group, lowering the British telecom name to Neutral from Overweight.


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