The unofficial closing bells put the DJIA up about 60 points to 12,482.22 (0.48%), the NASDAQ rose more than 17 points (0.64%) to 2,728.08, and the S&P 500 rose 0.35% or nearly 5 points to 1,293.66.

There were several analyst upgrades and downgrades today, including FedEx Corp. (NYSE: FDX) cut to ‘hold’ at Jefferies; BHP Billiton Ltd. (NYSE: BHP) started as ‘buy’ at Goldman Sachs; Intel Corp. (NASDAQ: INTC) cut to ‘neutral’ at JPMorgan; Tesla Motors Inc. (NASDAQ: TSLA) raised to ‘buy’ at Wunderlich; and Panera Bread Co. (NASDAQ: PNRA) raised to ‘overweight’ at Morgan Stanley.

Earnings reports since markets closed last Friday have led to some price changes as of the last half hour of trading today: McMoRan Exploration Co. (NYSE: MMR) is up 4.55% at $13.32; TD Ameritrade Holding Corp. (NASDAQ: AMTD) is down -1.72% at $16.02; Wells Fargo & Co. (NYSE: WFC) is up 0.67% at $29.81; Citigroup Inc. (NYSE: C) is down nearly -8% at $28.29; and Check Point Software Technologies Ltd. (NASDAQ: CHKP) is up nearly 8% at $54.93.

Other standouts from today include the following stocks:

Ku6 Media Co., Ltd. (NASDAQ: KUTV) is up nearly 154% at $3.50. The Chinese online video company has signed an agreement with Google Inc. (NASDAQ: GOOG) to offer international viewers a Chinese video channel on YouTube.

Convio Inc. (NASDAQ: CNVO) is up nearly 48% at $15.89, after setting a new 52-week high earlier. The provider of software to non-profit organizations has agreed to be acquired by Blackbaud Inc. (NASDAQ: BLKB) for $16/share, or about $312 million.

Venoco Inc. (NYSE: VQ) is up nearly 31% at $10.05. The independent oil and gas company is being taken private by its CEO. We have more coverage here.

R.R. Donnelly & Sons Co. (NYSE: RRD) is down nearly -16% at $12.12 after posting a new 52-week low of $12.08 earlier. The business services company said revenues for 2011 are going to be lower than expected.

Carnival Corp. (NYSE: CCL) is down nearly -14% at $29.57. The cruise ship operator is sinking following the disaster off the Italian coast that has left 11 dead and 29 missing. We have more coverage here.

Stay tuned for Wednesday. Federal Reserve Bank governor Daniel Tarullo is giving a speech. We have the following events on the schedule (all times Eastern):

• 7:00 a.m. – Mortgage Bankers Association mortgage applications
• 8:30 a.m. – Producer price index
• 9:15 a.m. – Federal Reserve report on industrial production
• 10:00 a.m. – Housing market index

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Paul Ausick

AGCO Corporation (NYSE: AGCO) Maintained Outperform as Bull of the Day at Zacks.
Apollo Group Inc. (NASDAQ: APOL) Reiterated Outperform and Raised Target to $60 at Credit Suisse.
Boston Scientific Corporation (NYSE: BSX) Maintained Hold but lowered estimates at Argus.
Career Education Corporation (NASDAQ: CECO) Cut to Hold at Argus.
Dendreon Corporation (NASDAQ: DNDN) Reiterated Neutral with $10 target at Baird.
FedEx Corporation (NYSE: FDX) Started as Outperform at Wells Fargo.
Goldman Sachs Group Inc. (NYSE: GS) Cut to Market Perform by Wells Fargo.
Huntsman Corporation (NYSE: HUN) named as Value Stock of the Day at Zacks.
Illinois Tool Works. Inc. (NYSE: ITW) Cut to Neutral at Credit Suisse.
Intel Corporation (NASDAQ: INTC) Cut to Neutral at Stern Agee.
Kohl’s Corporation (NYSE: KSS) Cut to Hold at Argus.
SanDisk Corporation (NASDAQ: SNDK) Raised to Buy at Stern Agee.
TD AMERITRADE Holding Corporation (NASDAQ: AMTD) Raised to Buy at Deutsche Bank.
The Travelers Companies, Inc. (NYSE: TRV) Raised to Outperform at Wells Fargo.
United Parcel Service, Inc. (NYSE: UPS) Started as Market Perform at Wells Fargo.
Urban Outfitters Inc. (NASDAQ: URBN) Started as Underperform and named as Bear of the Day at Zacks.
Vodafone Group PLC (NYSE: VOD) Raised to Buy at Goldman Sachs.
Zhongpin, Inc. (NASDAQ: HOGS) Started as outperform at Oppenheimer.

If you enjoyed this morning’s Wall Street research notes, you can sign up to receive these directly in your inbox each morning by joining our free email list in the box below.  We also include major movers, key stock calls, news on Warren Buffett and other gurus, as well as special exclusive feature stories.

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JON C. OGG

Previously, we had suggested that Goldman Sachs Group Inc. (NYSE: GS) or even Morgan Stanley (NYSE: GS) could have been considered as possible acquirers since they had become bank holding companies yet had zero banking operations.  That time has long-passed that either Goldman Sachs or Morgan Stanley would be potential acquirers.

E*TRADE’s review of strategic alternatives started in early August with an intent to maximize shareholder value.  One strategy was a possible sale.  The company’s noted, “…the Board unanimously determined that the continued execution of the company’s business plan is currently the best alternative for increasing stockholder value.”

Steven Freiberg, CEO and Interim Chairman also noted, “We will remain focused on delivering the best investing experience to our customers, strengthening our brokerage business, continuing to improve the performance of our loan portfolio and enhancing our franchise.”

The board of directors must have been looking at its stock charts upside down because continuing its path as is to maximize shareholder value hasn’t worked.  In July this was a $16.00 stock in hope that a deal would come.  Shares closed down 3.4% at $9.48 today, and the after-hours session has E*TRADE down another 4% at $9.10.

E*TRADE got far too creative during the mortgage boom and when the bubble popped it nearly assassinated this company.  Now E*TRADE continues to try to wind down many of its old legacy loans and accounts, and while things have improved there the company has not been able to walk away entirely from its prior follies.

It seems that buyers must have felt the liabilities could still be an unknown or that the black hole just goes too deep.  Its core business is an attractive one, but right now E*TRADE cannot even make good money on customers cash deposits just like its peers with short-term rates at next to zero.

E*TRADE has to remain on its own, and those who were pressing for a buyout will just have to invest in the company based upon its own internal merits.

JON C. OGG

Kass noted on Thursday evening on CNBC that it is his largest position because he thought that Charles Schwab Corp. (NYSE: SCHW) or TD AMERITRADE Holding Corporation (NASDAQ: AMTD) would be an acquirer of the company.

To highlight just how long E*TRADE has been in the buyout camp, we have noted back as far as the days of the crash in 2008 and 2009 that Goldman Sachs Group Inc. (NYSE: GS) or even Morgan Stanley (NYSE: MS), more likely the former rather than the latter, could step in to buy E*TRADE to take care of their “bank holding company status” when you consider that they have no real banking operations to speak of.  We have also noted that this could be bait when shares were far lower and even higher now that the last two months have proved to be so brutal.

This summer Goldman Sachs, in an analyst call (not an investment banker call), noted a higher target due to what it felt was a 30% chance of M&A heading its way.  It was also this summer that we put a maximum value at $20.00 per share in a buyout at the time and Thomson Reuters had a consensus price target objective at the time of roughly $16.50 at the time.  The problem with an E*TRADE buyout today is that its shares have pulled back incredibly hard in recent months losing half of its value since mid-July.

Even after a 2% gain to $9.05 today, the 52-week range is $7.74 to $18.13.  Now analysts have a consensus price target down closer to $14.00.  That old $20.00 max buyout price would have to be lowered.  It might have to be lowered considerably.  Investors just are not willing to value stocks at the same multiples today and a would-be acquirer would be expected to be in the same boat.

E*TRADE is now doubling its sales force to go after more and more of its trading clients for a larger piece of their business.  Retirement plans and other services seem to be the push.  Now that the stock has fallen precipitously, the Thomson Reuters consensus estimates are $0.67 EPS for 2011 and $0.89 EPS for 2012.  This represents a far more fair valuation where a buyer would not have to pay a ridiculous premium nor would a buyer have to pay a ridiculously excessive earnings multiple to acquire E*TRADE.  Still, anything closer to the summer levels might not make that “affordability” grade make the cut.

JON C. OGG

Adtran Inc. (NASDAQ: ADTN) Reiterated Buy and $49 target at Argus.
Allergan Inc. (NYSE: AGN) Started as Buy at Deutsche Bank.
Apple Inc. (NASDAQ: AAPL) Maintained Buy with $490 target at BofA/ML.
Automatic Data Processing Inc. (NYSE: ADP) Reiterated Buy and $60 Target at Argus.
Barrick Gold Corporation (NYSE: ABX) named value stock of the day at Zacks.
Citigroup Inc. (NYSE: C) Started as Market Perform at Wells Fargo.
Expedia, Inc. (NASDAQ: EXPE) named Bull of the Day at Zacks.
Gilead Sciences Inc. (NASDAQ: GILD) Raised to Buy at Goldman Sachs.
LinkedIn Corporation (NYSE: LNKD) Started as Overweight at Barclays.
Mastercard Incorporated (NYSE: MA) Cut to Neutral at Baird.
Nokia Corporation (NYSE: NOK) Raised to Buy at Societe Generale.
OpenTable, Inc. (NASDAQ: OPEN) Started as Underweight at Barclays.
Perfect World Co., Ltd. (NASDAQ: PWRD) Cut to Neutral at Credit Suisse.
Research in Motion Ltd. (NASDAQ: RIMM) Cut to Market Perform at Raymond James; Maintained Neutral but cut target to $30 at BofA/ML.
Royal Gold, Inc. (NASDAQ: RGLD) Cut to Neutral at HSBC.
Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE: TSM) Raised to Buy at BofA/ML.
TD AMERITRADE Holding Corporation (NASDAQ: AMTD) Raised to Buy at Citigroup.
Veeco Instruments Inc. (NASDAQ: VECO) Cut to Neutral at BofA/ML.

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JON C. OGG

We have gone as far in the past saying that Goldman Sachs Group Inc. (NYSE: GS) might consider making a play for E*TRADE.  That is just not realistic at all in today’s post-blowup financial world. After all, Goldman Sachs is a bank holding company that technically has no real banking operations for the public.  The time has come and gone for that to be a reality.  The other two contenders for making a play are Charles Schwab Corporation (NYSE: SCHW) and Morgan Stanley (NYSE: MS).  Realistically, Morgan Stanley might have a hard time getting approved by regulators to even consider making an acquisition after the financial mess.

One big problem in analyzing the valuation of any of these companies is that there are many legacy accounts that can skew calculated values if you just consider current or active accounts.  There is also the 80/20 rule in business that is probably a 90/10 rule in online brokerages… instead of 80% of the value being based upon 20% of total clients, it may be that 90% of the real value comes from only 10% of the clients.  We have tried to highlight the different calculations from to firm as a result of the reported variations from firm to firm.

E*TRADE Financial Corporation (NASDAQ: ETFC) was screened with a pre-earnings return on equity (ROE) of only about 1.6% and a forward price to earnings multiple of 15.8.  E*TRADE’s market cap was $3.45 billion after the shares recently closed at $15.64 against a 52-week range of $12.24 to $18.13.  The problem is that it just is not cheap.  The company now claims some 4.3 million customer accounts, which included 2.8 million brokerage accounts.  We continue to value these on a brokerage account basis today and its $3.8 billion market cap after today’s 6% gain to $16.64 give a per account value of close to $1,350.00 today.

TD AMERITRADE Holding Corporation (NASDAQ: AMTD) has a return of equity (ROE) of 15.2% and a forward price to earnings multiple of 15.  AMERITRADE’s market cap is $11.2 billion. The shares recently closed at $19.61.  The 52-week price range is $14.42 to $22.85.  TD AMERITRADE has just over 8.2 million total accounts but calls its total funded accounts as being 5.59 million.  If we just use the funded accounts we have a value implication of nearly $2,000.00 per account.

Charles Schwab Corp. (NYSE: SCHW) has a forward price to earnings multiple of 14.9.  Its market cap is $18.6 billion.  The shares recently closed at $15.44.  The 52-week price range is $12.51 to $19.63.  Schwab claims some 8.1 million client brokerage accounts, implying closer to a $2,200.00 per account value.

E Trade Financial Corporation (NASDAQ: ETFC) is up 7.3% premarket to $16.78, relative to a 52-week range of $12.24-$18.13. TD Ameritrade Holding Corp (NASDAQ: AMTD) will discuss at its upcoming board meeting the possibility of acquiring the company.

News Corporation (NASDAQ: NWSA) is down 2% before market open to $16.08, relative to a 52-week range of $11.91-$18.35. The company begins another likely turbulent week after the company finally sold the British tabloid responsible for the phone hacking controversy – News Of The World.

Silicon Laboratories (NASDAQ: SLAB) is down 8% premarket to $38.40, relative to a 52-week range of $34.10-$50.47. The company announced disappointing Q2 profits.

24/7 Wall St. will look at the Twitter posts at Reuters Biz, WSJ, Financial Times, CNN Money, MarketWatch, CNBC, and 24/7 Wall St. each day to see which stocks are most frequently mentioned. It is clear that in this area of social media these tweets are a sign of which companies the Twitter universe is interested in. Together, these financial sites are followed by nearly 1,000,000 Twitter users, which makes them a sizeable sample of Wall St.’s interests. In some cases, we will publish the actual tweets from the sites.

MSNBC: Blackberry maker to cut about 2,000 jobs http://on.msnbc.com/oJD4Yn

Reuters: Analysis: Investors face U.S. default risk with no Plan B http://reut.rs/pOI253

NYT: Blackberry Maker to Cut 2,000 Jobs http://nyti.ms/pwJcBL

Yahoo! Finance: Geithner: ‘We’re almost out of runway’ on the debt ceiling http://yhoo.it/pCvxAc

BBC: RIM to cut 2,000 jobs in shake-up http://bbc.in/praReq

CNN: BlackBerry maker Research in Motion to cut 2,000 jobs, more than 10% of its workforce, as part of a cost-cutting program.

MarketWatch: Research In Motion to lay off about 2,000 employees, some 10% of global workforce http://on.mktw.net/pXcqN0

Douglas A. McIntyre

TDAmeritrade (NASDAQ: AMTD) will consider a buyout of E*Trade (NASDAQ: ETFC) (Reuters)

The Quandt family, already large BMW holders, may buy a majority interest. (Reuters)

China and Iran have put an oil barter program into place (FT)

Douglas A. McIntyre

The U.S. has come perilously close to a cut of its debt to Aa (Reuters)

Moody’s warned that a Greek default was all but certain (Reuters)

The debt standoff has begun to move investors out of stock and into gold (Reuters)

The bond curve steepened as a U.S. default became more likely (Reuters)

China ordered the closing of two fake Apple (NASDAQ: AAPL) stores (Reuters)

Apple’s sales in China are expected to rocket higher (Reuters)

U.S. airlines are faced with higher security fees (Reuters)

Farm subsidy program payouts have been undermined by high grain prices (WSJ)

Earnings gains in S&P 500 stocks are increasingly from overseas (WSJ)

TDAmeritrade (NASDAQ: AMTD) will consider a bid for E*Trade (NASDAQ: ETFC) (WSJ)

Job additions will be a bigger issue in UAW negotiations than pay (WSJ)

The Bank of Ireland will get outside investment (WSJ)

Spain will exert more power over budgets among its regional governments (WSJ)

United Technologies (NYSE: UTX) may sell its Rocketdyne rocket operation (WSJ)

The UAW will concentrate on labor relations at a new VW plant (WSJ)

“Captain America: The First Avenger” was the No.1 movie of the weekend grossing $65.8 million (WSJ)

States are trying to cut public pension benefits (WSJ)

Dunkin’ Donuts leads a list of 11 IPOs this week (WSJ)

A debt deal for Greece will protect balance sheets of many large European banks (WSJ)

China and Iran will set up an oil barter system (FT)

Money market funds have cut their exposure to European banks (FT)

JP Morgan (NYSE: JPM) says a breakup of BP plc (NYSE: BP) similar to that of ConocoPhillips (NYSE: COP) could be worth $100 billion to investors (Bloomberg)

Samsung smartphone sales may pass Apple’s (Bloomberg)

Douglas A. McIntyre