The unofficial closing bells put the DJIA up nearly 67 points to 13,280.31 (0.5%), the NASDAQ rose about 4 points (0.13%) to 3,050.44, and the S&P 500 rose 0.57% or nearly 8 points to 1,405.89.

There were several analyst upgrades and downgrades today, including Watson Pharmaceuticals Inc. (NYSE: WPI) reiterated as ‘buy’ at Canaccord Genuity; AstraZeneca PLC (NYSE: AZN) raised to ‘neutral’ at BofA; Abercrombie & Fitch Co. (NYSE: ANF) raised to ‘buy’ at UBS; SunPower Corp. (NASDAQ: SPWR) raised to ‘buy’ at Citigroup; Yingli Green Energy Holdings Co. Ltd. (NYSE: YGE) raised to ‘buy’ at Citigroup; Costco Wholesale Corp. (NASDAQ: COST) cut to ‘hold’ at Deutsche Bank; and Meru Networks Inc. (NASDAQ: MERU) cut to ‘neutral’ at RW Baird.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Arch Coal Inc. (NYSE: ACI) is down -3.8% at $9.39 (more coverage here); Veeco Instruments Inc. (NASDAQ: VECO) is up 14.8% at $34.67 (more coverage here); Pep Boys – Manny, Moe & Jack (NYSE: PBY) is down -21.8% at $11.67 (more coverage here); Archer Daniels Midland Co. (NYSE: ADM) is up 7.9% at $33.25; Corn Products International Inc. (NYSE: CPO) is down -0.14% at $56.98; Avon Products Inc. (NYSE: AVP) is down -7.6% at $19.95; Domino’s Pizza Inc. (NYSE: DPZ) is down -9.6% at $34.18; Pfizer Inc. (NYSE: PFE) is down -0.14% at $22.87; and Valero Energy Corp. (NYSE: VLO) is up 0.9% at $24.92.

Tomorrow we get earnings from Barrick Gold Corp. (NYSE: ABX), JDS Uniphase Corp. (NASDAQ: JDSU), Marathon Oil Corp. (NYSE: MRO), First Solar Inc. (NASDAQ: FSLR), and Visa Inc. (NYSE: V).

Other standouts from today include the following stocks:

P.F. Chang’s China Bistro Inc. (NASDAQ: PFCB) is up 29.7% at $51.46. The company is being taken private in a deal worth $1.1 billion. More coverage here.

Delta Air Lines Inc. (NYSE: DAL) is up 0.8% at $11.05. The airlines bought an oil refinery from newly-public Phillips 66 (NYSE: PSX). More coverage here.

Chesapeake Energy Corp. (NYSE: CHK) is up 6.3% at $19.60. The company’s chairman will be replaced and the company reports earnings after markets close today. More coverage here.

Stay tuned for Wednesday. Fed Governor Daniel Tarullo and Richmond Fed President Jeffrey Lacker are giving speeches. We have noted the following events on the schedule (all times Eastern):

• 7:00 a.m. – Mortgage Bankers Association purchase applications
• 7:30 a.m. – Challenger job cut report
• 8:15 a.m. – ADP employment report
• 10:00 a.m. – Factory orders
• 10:30 a.m. – EIA weekly petroleum status report

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Paul Ausick

Canaccord  also reiterated its buy rating on Watson Pharmaceuticals (WPI: NYSE)

Goldman Sachs upgraded Community Health Systems (NYSE: CYH) to neutral.

Bank of America Upgraded AstraZeneca (NYSE: AZN) to neutral

Deutsche Bank downgraded Costco Wholesale (NASDAQ: COST) to hold

Pfizer Inc. (NYSE: PFE) reported first-quarter net income fell 19% on 6.6% lower revenue. Earnings were $1.79 billion, or 24 cents a share, compared with $2.22 billion, or 28 cents, in the year-earlier quarter. Adjusted earnings were 58 cents a share compared with 60 cents.

Thomson Reuters (NYSE: TRI) reported its first-quarter profit was $314 million, or 38 cents a share compared to $250 million, or 30 cents a share a year ago. Revenue rose to $3.654 billion, from $3.3 billion a year ago.

Avon Products Inc. (NYSE: AVP) reported an 82% drop in first-quarter profit to $26.5 million– 6 cents a share, from $143.6 million, or 33 cents, a share in the same quarter last year. Sales fell 2% to $2.53 billion for the quarter, down from $2.59 billion in the year-ago period.

Canaccord’s Salveen Richter has maintained a SELL rating with a price target down at $12.00 per share.  This is important because Amylin closed at $25.73 and the 52-week trading range is $8.03 to $26.87.  The report is based in part on the notion that Bydureon sales are off to a slow start that was disclosed in the company’s earnings report yesterday.  The report was called a weak earnings report with Bydureon revenue of only $6.9 million versus $10.4 million expected.

The report may be very much of a standout because some of the companies which have been named as likely and/or potential bidders are Bristol-Myers Squibb Company (NYSE: BMY), Merck & Co. Inc. (NYSE: MRK), AstraZeneca PLC (NYSE: AZN), Sanofi (NYSE: SNY), and Takeda.  We have also wondered perhaps whether or not Pfizer Inc. (NYSE: PFE) or Novo Nordisk A/S (NYSE: NVO) could be among the possible buyers, but these two seem to be dismissed elsewhere as likely buyers.

The report does caution about a floor from the buyout speculation: “That said, continued speculation on the company’s takeout potential will likely set a floor on Amylin shares at current levels, barring a potential E.U. partnership.”   Other notes as follows: Bydureon captured 5.9% of the GLP–1 market… Bydureon is being impacted by competition, healthcare reform and reimbursement/access… AMLN Q1/12 total revenue of $153.7 million was under consensus of $162.1 million… it is lowering FY12 Bydureon revenue estimate to $133.9 million from $209.5 million… firm is increasing its non-GAAP SG&A expense to $395.5 million from $356.3 million… firm is lowering FY12 GAAP EPS estimate to -$1.68 EPS from -$1.09 EPS.

Canaccord Genuity’s valuation puts its 12-month price target at $12.00 and it is based upon 20-times the firm’s fully taxed and fully diluted GAAP earnings estimate for 2016 of $1.55 EPS that is then discounted back to 2012 at a rate of 28%.

What is interesting is that the Thomson Reuters consensus target is only $18.10, so there is quite a takeover premium built into the stock.  Amylin may get acquired or it may not.  This is a bold call considering that the company even recently announced that Carl Icahn voluntarily dismissed his suit against the company.  It would seem that Carl Icahn believes that a premium buyout is headed Amylin’s way.

JON C. OGG

Ardea Biosciences, Inc. (NASDAQ: RDEA) is now worth about $1.2 billion and the stock’s prior 52-week high had been $29.06. Now shares are up at $31.58 and AstraZeneca buys a gout and cancer pipeline here.  The problem is that no one is expecting big earnings nor even big sales any time soon.  Thomson Reuters has estimates of -$3.64 EPS on only $13.4 million in revenue in 2012 and -$1.89 EPS on almost $56 million in 2013.  Ardea has just over 100 employees and its pipeline includes two gout treatments and two cancer treatments (one for pancreatic cancer and one for primary liver cancer.

Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) now has a $3.8 billion market capitalization rate.  With a fresh new diabetes drug approval and with prior speculation of a super-premium buyout, this one already has a lot of premium built in.  Shares went from about $11 to more than $17 early in 2012 and then from about $16 to over $24 over the last month before settling down around $23 of late.  Now there is talk that it has several interested bidders.  Amylin’s ongoing pipeline is concentrated around diabetes and obesity but its main products are BYDUREON and BYETTA.  Amylin is also expected to lose money in 2012 and in 2013, but its sales were $650 million in 2011 and are expected to rise to $688.4 million in 2012 and $852.9 million in 2013.

Bristol-Myers Squibb Company (NYSE: BMY) reportedly made a bid for Amylin already, and newer reports have Merck & Co. Inc. (NYSE: MRK), AstraZeneca PLC (NYSE: AZN), and Takeda all lined up as would-be potential acquirers.

It is very difficult to get an apples to apples comparison here when you consider that one company is in the development and clinical stage and the other is already in the product commercialization stage.  Ardea is of course a much larger unknown that Amylin.  Its price and market capitalization also reflect this.

JON C. OGG

One potential buyer is Sanofi (NYSE: SNY), the Paris-based drug company that is developing a similar treatment for diabetes. Amylin ended a long relationship with Eli Lilly & Co. (NYSE: LLY) last November, but still owes Lilly payments of $1.2 billion over the next several years. AstraZeneca plc (NYSE: AZN) is another drug maker believed to be on the look-out for an acquisition as is Merck & Co. Inc. (NYSE: MRK).

Amylin’s diabetes drugs Byetta and Bydureon are both approved for use in the US. Byetta is a twice-weekly injection for Type 2 diabetes, while Bydureon, which was approved only in January, is a once-a-week injection for the disease. Diabetes affects some 300 million people worldwide and 26 million in the US alone. Drugs to combat the disease could be enormous sellers.

The market is very happy with the news from Amylin. Shares are up more than 10% in the pre-market this morning, at $25.15 in a 52-week range of $8.03.25.84.

Paul Ausick

This morning the company announced that another development-stage drug, TC-6987, had failed an exploratory Phase 2 trial and that the company would no longer pursue approval for the drug as a treatment for diabetes. However the drug did meet its trial’s goals as an asthma drug, and Targacept’s CEO noted:

With the positive outcome in our TC-6987 asthma study, we have accomplished our goal of detecting in patients a signal of the potential of NNR [neuronal nicotinic receptors] Therapeutics in the treatment of disorders outside of the CNS, while at the same time further establishing a favorable safety and tolerability profile for this alpha7-selective NNR Therapeutic.

Targacept’s shares are down about -2.4% in early trading today, at $5.26 in a 52-week range of $4.90-$27.22.

Tim Cook, Apple’s CEO, is in China to address production labor problems. (Reuters)

The European Union begins an investigation of the United Technologies (NYSE: UTX) bid for Goodrich (NYSE: GR). (Reuters)

Fed Chairman Bernanke says “easy money” remains necessary because of the slow jobs recovery. (WSJ)

Houston-based Enterprise Products Partners (NYSE: EPD) and Enbridge (NYSE: ENB) of Calgary plan to create a pipeline that will compete with the Keystone XL. (WSJ)

German consumer confidence slips in a recent poll by GfK. (WSJ)

Nokia (NYSE: NOK) will sell its new high-end Lumia 900 smartphone for $99.99 in the U.S. (WSJ)

Chancellor Merkel says she supports a temporary increase in European bailout funds. (WSJ)

The Federal Trade Commission will ask Congress to examine new digital privacy rules. (WSJ)

AstraZeneca (NYSE: AZN) cannot delay the distribution of generic versions of its antipsychotic drug Seroquel. (WSJ)

Banks that did poorly in recent stress tests performed by the Fed want data used to make the decisions. (WSJ)

Some states may run pension plans for companies. (NYT)

BWM recalls 1.3 million cars due to battery flaws. (NYT)

Goldman Sachs (NYSE: GS) plans to enter the electronic bond trading industry. (FT)

Google (NASDAQ: GOOG) inches closer to the release of a self-driving car. (Bloomberg)

Douglas A. McIntyre

Teva’s price sheet shows the difference a patent makes in the UK. An equal supply of 100-mg coated tablets of Seroquel costs about $180 compared with the generic cost of about $27. In its announcement, Teva notes that it has released 10 new products in 11 weeks, and 7 of those came on the first day of patent expiration.

Teva’s announcement is available here.

The company’s share price is up about 1.5% at $43.72 in a 52-week range of $35.00-$51.30.

AstraZeneca wanted the FDA to delay the introduction of the generic because the company had “marketing exclusivity periods” for the language on the label of its Seroquel products that did not end until December. The FDA denied the request, the company sued, and the federal court sided with the FDA. AstraZeneca said in a press release this morning that it is “evaluating its options.”

The company’s patent protection on Seroquel ends today. The company posted revenue of $5.83 billion on sales of Seroquel in 2011. Between now and 2016, AstraZeneca loses patent protection on three more of its best-sellers, Atacand, Nexium, and Crestor.

Shares are down -0.66% in the pre-market at $44.88 in a 52-week range of $40.89-$52.54.

Targacept’s CEO said that the company has been preparing for this possibility and that it will announce its plans by the end of April. The company has more than $225 million in cash available according to the CEO.

Targacept’s shares are down -27% at $5.41 in a 52-week range of $4.91-$27.22. AstraZeneca’s shares are up about 0.4% at $45.58 in a 52-week range of $40.89-$52.54.