The unofficial closing bells put the DJIA down more than 63 points to 12,632.08 (-0.50%), the NASDAQ fell nearly 9 points (-0.30%) to 2,893.76, and the S&P 500 fell -0.57% or nearly 8 points to 1,330.66.

There were several analyst upgrades and downgrades today, including Amazon.com Inc. (NASDAQ: AMZN) raised to ‘outperform’ at Credit Suisse; Applied Materials Inc. (NASDAQ: AMAT) cut to ‘hold’ at Needham; Colgate-Palmolive Co. (NYSE: CL) raised to ‘buy’ at Argus; McDonald’s Corp. (NYSE: MCD) cut to ‘neutral’ at Cowen; and Phillips 66 (NYSE: PSX) started as ‘buy’ at Citigroup.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Renren Inc. (NYSE: RENN) is up 5.5% at $5.79; Agilent Technologies Inc. (NYSE: A) is up XX% at $XX; A123 Systems Inc. (NASDAQ: AONE) is up 4.5% at $40.63; Arctic Cat Inc. (NASDAQ: ACAT) is down -10.6% at $37.84; Dick’s Sporting Goods Inc. (NYSE: DKS) is up 6.8% at $50.45 after posting a new 52-week high of $51.65 earlier today; Saks Inc. (NYSE: SKS) is down -0.5% at $10.00; TJX Companies Inc. (NYSE: TJX) is up 7.1% at $42.50; Valspar Corp. (NYSE: VAL) is down -6.7% at $46.45, and The Home Depot Inc. (NYSE: HD) is down -2.6% at $48.61 (more coverage here).

On Wednesday we are scheduled to get earnings from 8×8 Inc. (NASDAQ: EGHT), Abercrombie & Fitch Co. (NYSE: ANF), Chico’s FAS Inc. (NYSE: CHS), Deere & Co. (NYSE: DE), Jack in the Box Inc. (NASDAQ: JACK), and Target Corp. (NYSE: TGT).

Other standouts from today include the following stocks:

Facebook Inc. (soon to be NASDAQ: FB) raised its IPO price range from from $28-$35 to $34-$38. It is possible the world will regain its balance following the company’s IPO, expected for Friday. But maybe not.

Patriot Coal Corp. (NYSE: PCX) is down -18.8% at $3.92 after posting a new 52-week low of $3.91 earlier today. The coal miner lowered shipment and price expectations this morning. More coverage here.

JPMorgan Chase & Co. (NYSE: JPM) is up 1.7% at $36.39. CEO Jamie Dimon dodged a bullet at today’s shareholder meeting and kept both his jobs.

Stay tuned for Wednesday. St. Louis Fed President James Bullard is giving a speech. We have also noted the following events on the schedule (all times Eastern):

• 7:00 a.m. – Mortgage Bankers Association purchase applications
• 8:30 a.m. – Housing starts
• 10:30 a.m. – EIA weekly petroleum status report
• 2:00 p.m. – FOMC minutes released

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Paul Ausick

AAR Corporation (NYSE: AIR) named Bear of the Day at Zacks.

AGCO Corporation (NYSE: AGCO) named Bull of the Day at Zacks.

Akamai Technologies, Inc. (NASDAQ: AKAM) Raised to Buy at Janney Capital.

Amazon.com, Inc. (NASDAQ: AMZN) Raised to Outperform at Credit Suisse.

Applied Materials Inc. (NASDAQ: AMAT) Cut to Hold at Needham.

Colgate-Palmolive Co. (NYSE: CL) Raised to Buy at Argus.

Dominion Resources, Inc. (NYSE: D) Raised to Buy at Jefferies.

Flextronics International Ltd. (NASDAQ: FLEX) Raised to Buy at BofA/ML.

Groupon, Inc. (NASDAQ: GRPN) Raised to Buy at Citigroup; Raised to Buy at Stern Agee.

Infoblox Inc. (NYSE: BLOX) Started as Equal-weight at Morgan Stanley; Started as Overweight at Stephens; Started as Neutral at Goldman Sachs.

Jabil Circuit Inc. (NYSE: JBL) Raised to Buy at BofA/ML.

J.B. Hunt Transport Services Inc. (NASDAQ: JBHT) Started as Outperform at William Blair.

Juniper Networks, Inc. (NYSE: JNPR) Raised to Buy at BofA/ML.

McDonald’s Corporation (NYSE: MCD) Cut to Neutral at Cowen.

Par Pharmaceutical Companies Inc. (NYSE: PRX) named value stock of the day at Zacks.

Phillips 66 (NYSE: PSX) Started as Buy at Citigroup.

Prudential Financial, Inc. (NYSE: PRU) Cut to Hold at Argus.

Royal Bank of Scotland Group PLC (NYSE: RBS) Raised to Equalweight at Morgan Stanley.

Southern Company (NYSE: SO) Raised to Buy at Jefferies.

Total SA (NYSE: TOT) Raised to Buy at UBS.

If you enjoyed the top analyst upgrades and downgrades, you can join our free email newsletter that includes analyst summaries each morning sent right to your inbox.  We also cover top issues such as IPOs, special financial exclusives, mergers and more. Sign up in the box below.

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JON C. OGG

People are going to buy Coke and Pepsi, most likely, in almost any economy.  Pepsico, Inc. (NYSE: PEP) is actually up 0.6% at $67.23 against a 52-week high of $71.89; Coca-Cola Company (NYSE: KO) is down 0.6% at $76.95 against a 52-week high of $77.82.  With yields of about 3% on average, these pay about the same as the 30-Year Treasury’s long-bond.  The beer segment remains uncorrelated to defensive stocks as it did last week (in part due to currencies): Anheuser-Busch InBev SA (NYSE: BUD) is down by 0.7% at $71.43 and Molson Coors Brewing Company (NYSE: TAP) is down 1.2% at $40.81.  Even the best water utility in America via American Water Works Company, Inc. (NYSE: AWK) is down another 1% $33.99 against a 52-week and all-time high of $34.89.

Food is supposed to be defensive.  You gotta eat, right?  McDonald’s Corporation (NYSE: MCD) is down almost 0.4% at $91.55 and getting further and further away from that $102.22 all-time high recently seen.  The rest of the defensive food segment is up to mixed as food is defensive and with dividends:

• Kraft Foods Inc. (NYSE: KFT) is up 0.4% at $39.20 with a 3% yield that challenges the long-bond;
• ConAgra Foods, Inc. (NYSE: CAG) is down 0.2% at $25.67 with a 3.7% yield that beats the long-bond;
• Campbell Soup Co. (NYSE: CPB) is up 0.25% at $34.49 with a 3.4% yield that beats the long-bond;
• Hormel Foods Corporation (NYSE: HRL) is down only 0.1% at $29.08 but its 2.1% yield is ‘only’ paying what the 10-year has been paying recently.

Smoking has those nice 5%-plus yields for the defensive tobacco sector: Altria Group Inc. (NYSE: MO) is down only 0.1% at $31.75 against a 52-week high of $32.62; Vector Group Ltd. (NYSE: VGR) is down 0.5% at $16.73; and Reynolds American Inc. (NYSE: RAI) is down only 0.2% at $40.41 against a high of $42.81.

Diapers, toothpaste, deodorant, and shaving… consumer products are acting defensive: Procter & Gamble Co. (NYSE: PG) is down only 0.3% at $63.50 with a 3.5% yield; Kimberly-Clark Corporation (NYSE: KMB) is up by 0.3% at $79.62 with a 3.7% yield; Colgate-Palmolive Co. (NYSE: CL) is down 0.1% at $99.20 but it only pays about 2.5% for a dividend yield.

Drug and medical is mixed to positive: Merck & Co. Inc. (NYSE: MRK) is up by over 0.8% at $38.35 with its 4.4% yield; Pfizer Inc. (NYSE: PFE) is down only $0.01 at $22.64 with its 3.9% yield; and Johnson & Johnson (NYSE: JNJ) is down 0.5% at $64.00 with its 3.8% yield.

Those smartphones and telephones are not acting defensive at all today with Verizon Communications Inc. (NYSE: VZ) down 0.9% at $40.80 with its 5% yield and with AT&T, Inc. (NYSE: T) down 0.7% at $33.36 with a 5.4% yield.

Some investors are willing to suffer from the near-zero return of Treasuries, while others are going to try to look for the safest of stocks to seek safe and steady dividends.  The DJIA is down 0.7% and the S&P 500 was down 0.6% at last look.  Both are actually much better than what we were looking at just two hours or so ago.

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JON C. OGG

After the weakness in the broad market has the DJIA down 140 points (or -1.1%) and the S&P 500 Index down 15 points or 1.1%, it turns out that most of the defensive stock sector leaders are holding up far better than the broad market in our go-to defensive stock portfolio.  We have taken a look at each of these with share price snapshots right before Noon EST.

No matter what, you gotta drink!  Pepsico, Inc. (NYSE: PEP) is down 0.5% at $66.28 against a 52-week high of $71.89; Coca-Cola Company (NYSE: KO) is down 0.4% at $76.97 against a 52-week high of $77.82.  With yields of about 3% on average, these are now challenging the 30-Year Treasury yields.  The beer segment is not acting defensive as it should, perhaps because they are foreign issues now with more currency risks: Anheuser-Busch InBev SA (NYSE: BUD) and Molson Coors Brewing Company (NYSE: TAP) are not acting very defensive with price corrections of 3% and 2$ respectively.

Perhaps the most defensive you can get is water, and the top water utility is American Water Works Company, Inc. (NYSE: AWK) with a premium valuation.  This water leader is down 0.8% at $33.73 against a 52-week and all-time high of $34.89.

Food is supposed to be defensive, although a drop of 1.5% in McDonald’s Corporation (NYSE: MCD) to $94.10 is causing some added stress in what was the darling of the DJIA in 2011.  The rest of the defensive food segment seems to be less damaged when you evaluate the moves: Kraft Foods Inc. (NYSE: KFT) is down only 0.4% at $39.11; ConAgra Foods, Inc. (NYSE: CAG) is down 0.7% at $25.52; Campbell Soup Co. (NYSE: CPB) is down only 0.3% at $33.97; and Hormel Foods Corporation (NYSE: HRL) is down only 1 penny at $28.92 as the world is getting excited about Spam again.

Smoking is defensive again and the tobacco stocks are holding up much better than the broad market with those 5% and higher dividends: Altria Group Inc. (NYSE: MO) is down only $0.3% at $32.10 against a 52-week high of $32.62; Vector Group Ltd. (NYSE: VGR) is down only 0.2% at $16.88; and Reynolds American Inc. (NYSE: RAI) is down only 0.2% at $40.18 against a high of $42.81.

Shaving, diapers, toilet paper, and other consumer products are acting defensive with some gains on a weak day.  Procter & Gamble Co. (NYSE: PG) is trading up $0.11 at $64.36 and Kimberly-Clark Corporation (NYSE: KMB) is up $0.08 at $79.08 with KMB challenging the 52-week high.  Colgate-Palmolive Co. (NYSE: CL) is down ‘only’ 0.5% at $99.10 against a 52-week high of $100.81.

Drug and medical is holding up on the consumer end with losses look far less than the broader market: Merck & Co. Inc. (NYSE: MRK) is down 0.35% at $38.40; Pfizer Inc. (NYSE: PFE) is down 0.3% at $22.38; and Johnson & Johnson (NYSE: JNJ) is down the least with a drop of 0.2% at $64.65 against a 52-week high of $68.05.

Those smartphones and telephones are somewhat defensive, and those 5%-plus yields sure shield investors who are worried about chasing the hottest growth stocks.  Verizon Communications Inc. (NYSE: VZ) is down only 1-penny at $40.52 with a 5% dividend yield and AT&T, Inc. (NYSE: T) is actually up 0.2% at $33.08 with a yield of about 5.4%.

When investors want safety and when the Treasury yield is so low on the longer-term Treasury market, many investors turn to the safety of the higher dividends and safer stocks that are defensive.  Greece and the rest of PIIGS may fall again, but the logic is that U.S. consumers still have to eat, drink, shave, put on deodorant, and tend to stick with their core vices as best as they can.

JON C. OGG

First, the good news. P&G reported adjusted EPS of $0.94, a penny better than the consensus estimate of $0.93. Revenue came in a $20.19 billion, about -5% lower than the estimate of $20.29 billion. The company blamed the lower revenues on a government price cap in Venezuela and lower sales in some developed markets.

For its fiscal fourth quarter ending in June, P&G forecast adjusted EPS of $0.79-$0.85, compared with the current consensus estimate of $0.93. For the full 2012 fiscal year, P&G now forecasts EPS of $3.82-$3.88, well below the current consensus estimate of $3.98.

Here’s another problem that hit P&G in the third quarter: “The benefits from sales growth and cost savings were offset by higher commodity costs.” P&G’s gross margins for the quarter were down -1.5% partly because the company was unable to pass along higher costs to customers. Kimberly-Clark was able to raise prices, but when P&G tried the same thing, competitors refused to follow and the company had to reduce prices to old levels.

P&G’s shares are down -3.2% in late morning trading at $64.74 in a 52-week range of $57.56-$67.95.

Paul Ausick

The company was able to lower its costs and improve its sales in Asia enough to overcome lagging revenue in the US. The maker of Kleenex tissues and Huggies diapers plans to increase its marketing expenditures in an effort to increase purchases of some of its other products. Huggies sales are down in the US as families have fewer children or switch to lower cost brands.

Kimberly-Clark reiterated its full-year EPS guidance of $5.00-$5.15, not including restructuring costs, and expects revenues to be flat to up 1%. Proctor & Gamble, which reports earnings next Friday, is expected to post EPS of $0.93 on revenue of $20.3 billion. Colgate-Palmolive reports earnings next Thursday is expected to show EPS of $1.24 on revenue of $4.18 billion.

Of the three, Kimberly-Clark’s dividend yield is the highest, at 3.9%, while Dow component Procter & Gamble sports a dividend yield of 3.4% and Colgate-Palmolive’s yield is 2.5%. Colgate’s forward P/E ratio is nearly 17, while P&G’s is around 16 and Kimberly-Clark’s is about 14. All three are included in S&P’s list of 51 Dividend Aristocrats for 2012.

Kimberly-Clark’s shares are up about 2.2% today at $76.90 after posting a new 52-week high of $77.09 earlier this morning. The 52-week low is $61.00. P&G’s stock also got a boost this morning, to within $0.35 of its 52-week high of $67.95. Colgate came even closer, within two pennies of its 52-week high of $98.77.

Paul Ausick

The results come from a new survey of the eight countries conducted by Japan’s Nikkei BP Consulting. Other top brands in India include Colgate-Palmolive Co. (NYSE: CL) and Coca-Cola Co. (NYSE: KO). In Indonesia, Honda Motor Co. Ltd. (NYSE: HMC), Toyota Motor Corp. (NYSE: TM), and Google Inc. (NASDAQ: GOOG) are among the top five. In Thailand, McDonald’s Corp. (NYSE: MCD) joins Sony, Nokia, and Honda in the top five and in Vietnam the top global brands are Nokia, Honda, Sony, and Google.

Among more developed countries, China’s top global brands are Apple, Microsoft Corp. (NASDAQ: MSFT), Mercedes-Benz, BMW, and Nokia. In Japan, the top five includes Apple, Google, Sony, and Amazon.com Inc. (NASDAQ: AMZN). South Korea’s top five includes Apple, Samsung (OTC: SSNLF.PK), and Nike Inc. (NYSE: NKE). The Taiwanese list includes Apple, Sony, HTC Corp., Google, and Walt Disney Inc. (NYSE: DIS). Yahoo! Inc. shows up in the top ten brands in Japan and Taiwan, but in no other countries.

Some observations:

• Apple is pretty clearly the leading global brand among the more developed countries, although it does not appear among the top ten in the less-developed nations. The issue is whether or not Apple will try to change that by attacking the Indian and Indonesian markets.
• Nokia may be struggling, but the company’s brand power in India and Indonesia, each with a population of more than 1 billion people, suggests that if the Finnish giant can deliver a low-priced smartphone it has a chance to make a big noise in the industry again.
• No US carmaker is among the top ten brands in any of the eight countries. Not a good sign.
• Google does not appear among the top ten brands in China. The company’s troubles with the government have had a punishing effect, and Google may end up writing off China.
• Sony, another company suffering from a variety of ills, continues to be included in the top 10 in 7 of the 8 countries surveyed (only South Korea leaves Sony out). For Sony that could mean that it might have to consider moving its brand down the scale a bit to take advantage of its strength in the less-developed nations.
• Yahoo’s strength in Japan is well-established and may be the most valuable asset the struggling company has.
• The top brands in China include luxury brands like Mercedes and BMW, probably a sign of aspirational consumption as much as the reality of daily life in China. What the inclusion could mean is that other luxury brands could do well, but at the cost of reducing margins in order to grow brand power.

The full study is available here.

Paul Ausick

Read the Ten Cheap Products Making American Companies Billions

All of the companies that make the most money from selling inexpensive items have exceptionally strong brands. They are highly recognizable and held in high regard. Coca-Cola, which makes billions of dollars off its trademark drink Coke, is the most valuable brand in the world, according to brand valuation company Interbrand. According to Brand Z, McDonald’s, producer of the world’s favorite french fries, is the most valuable brand. Other brands, such as Cheerios, Campbell’s, and Starbucks, are also instantly recognizable.

These products have such strong brands partly because their parent companies spend huge sums of money on advertising. In 2011, Procter & Gamble, maker of Gillette razors, spent $9.3 billion on ads for all products — 11.3% of its total sales. This amount increases substantially each year, reflecting the lengths companies must go to preserve market share. Ian Cook, chief executive of Colgate-Palmolive, recently promised “increased advertising support behind many new and existing Colgate products” in 2012 to protect its global standing. The company said it had increased advertising spending in the fourth quarter to $428 million, up 5% from one year ago.

Additionally, these brands benefit from having been around for years and having existed in the public conscious a very long time. Products such as Coke, Colgate toothpaste, and Dole bananas have been around since the 19th century. Campbell’s soup and Cheerios have been household staples since the middle of the 20th century. Consumers have grown to trust the brands and expect a certain level of quality.

24/7 Wall St. reviewed the 500 largest companies by sales to identify the ones that focus on inexpensive consumer goods and low-priced food products. We then looked at the most inexpensive products sold for less than $5 and hold the highest market share. These are the cheapest products making American companies billions.

On an adjusted basis, P&G sees Fiscal 2012 earnings of $4.00 to $4.10 EPS and total sales up about 3% to 4%.  Thomson Reuters has a consensus earnings estimate of $4.17 EPS and $86.15 billion.  That would be a tad light on earnings and up to $1 billion light on revenues.

Higher commodity costs are expected to be a drag on third quarter earnings and a unfavorable product mix and an unfavorable geographic mix are all also dragging on earnings for the current quarter.  For the rest of the year, foreign exchange is expected to hurt sales by about 3% to 4%.

Rival Kimberly-Clark Corporation (NYSE: KMB) already took it on the chin this week after its earnings, while Colgate-Palmolive Company (NYSE: CL) has traded higher after its earnings.  Many investors have been moving to more risk-trade investments rather than defensive stock trades this week after Ben Bernanke telegraphed that the FOMC believes interest rates will remain exceptionally low through the end of 2014.

Kimberly-Clark now yields almost 4% and P&G yields about 3.2%, while Colgate-Palmolive yields almost 2.7%. 

P&G shares are indicated down 1.3% at $63.95 and the 52-week trading range is $57.56 to $67.72.

JON C. OGG

Most of the largest companies in the U.S. will not have large earnings swings from last year, with the notable exception of financial firms. The majority of banks and investment houses will suffer earnings declines because of poor trading results and bad loans, notwithstanding the fact that JPMorgan Chase (NYSE: JPM), arguably the best-run bank in America, is on this list, as is Wells Fargo (NYSE: WFC) . Corporations like IBM (NYSE: IBM) and Procter & Gamble (NYSE: PG) have such huge customer bases worldwide that they can hardly outperform the global economy. What differentiates them is their ability to manage their operations better than peers as they keep expenses low and take all the advantages they can of their significant market shares.

24/7 Wall St. looked at the top 200 companies in the Fortune 500 based on the revenue in the past reported year. We then reviewed earnings and earnings forecast from Thomson/First Call. There were some cases in which earnings appeared to be too low or too high because of events in the past month. We took those into account when we produced the final numbers.

This is 24/7 Wall St.’s 10 Most Profitable Companies for 2012.