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.

The unofficial closing bells put the DJIA down almost 27 points to 12,938.75 (-0.21%), the NASDAQ fell more than 15 points (-0.52%) to 2,933.17, and the S&P 500 fell -0.33% or nearly 5 points to 1,357.66.

There were several analyst upgrades and downgrades today, including Apple Inc. (NASDAQ: AAPL) reiterated as ‘outperform’ and target price lifted to $600 at Credit Suisse; Dell Inc. (NASDAQ: DELL) cut to ‘neutral’ at Citigroup and cut to ‘hold’ at Needham; The Mosaic Co. (NYSE: MOS) raised to ‘buy’ at Canaccord Genuity; Gilead Sciences Inc. (NASDAQ: GILD) cut to ‘market perform’ at Bernstein; and Dendreon Corp. (NASDAQ: DNDN) started as ‘neutral’ at Citigroup.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Basic Energy Services Inc. (NYSE: BAS) is up 0.15% at $19.90; Community Health Systems Inc. (NYSE: CYH) is up 14.3% at $23.61; Grand Canyon Education Inc. (NASDAQ: LOPE) is down -0.95% at $17.67; Range Resources Inc. (NYSE: RRC) is up 3.4% at $66.47; Central European Media Enterprises Ltd. (NASDAQ: CETV) is down -18.5% at $6.93; Chico’s FAS Inc. (NYSE: CHS) is up 16.9% at $14.97; Dollar Tree Inc. (NASDAQ: DLTR) is down -0.76% at $87.34; Garmin Ltd. (NASDAQ: GRMN) is up 9.2% at $48.81 after posting a new 52-week high of $49.93 (more coverage here); Novagold Resources Inc. (AMEX: NG) is flat at $8.75; R.R. Donnelley & Sons Co. (NYSE: RRD) is down -1.8% at $13.00; and Toll Brothers Inc. (NYSE: TOL) is down -4.8% at $22.56 (more coverage here).

Other standouts from today include the following stocks:

HealthStream Inc. (NASDAQ: HSTM) is up nearly 34% at $23.18 after posting a new all-time high of $23.19 earlier today. The Internet-based health learning company beat both EPS and revenue expectations in its most recent quarter.

Sourcefire Inc. (NASDAQ: FIRE) is up nearly 27% at $45.34 after posting a new all-time high of $45.50 earlier today. The Internet security provider handily beat earnings and revenue expectations last night.

Threshold Pharmaceuticals Inc. (NASDAQ: THLD) is up nearly 20% at $6.0. The pharmaceutical maker yesterday announced positive results for its pancreatic cancer treatment.

Newfield Exploration Co. (NYSE: NFX) is down more than -12% at $37.06. The independent oil & gas company missed EPS and revenue estimates last night.

Brightpoint Inc. (NASDAQ: CELL) is down more than -11% at $8.89. The mobile-phone wholesaler has cut its outlook for 2012.

Stay tuned for Thursday. We have noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – New US claims for unemployment benefits
• 10:00 a.m. – Federal Housing Finance Agency (FHFA) house price index
• 10:30 a.m. – EIA weekly natural gas storage report
• 11:00 a.m. – EIA weekly petroleum status report
• 11:00 a.m. – Kansas City Fed manufacturing index
• 1:00 p.m. – 7-year note auction
• 4:30 p.m. – Federal Reserve balance sheet and money supply

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Paul Ausick

Yesterday HCA posted second-quarter EPS of $0.43, down -35% from the same period a year ago, and badly missing forecast earnings of $0.59. Revenue rose, but still missed estimates. The report weighed down other stocks in the health care sector, included Tenet Healthcare Corp. (NYSE: THC), Health Management Associates Inc. (NYSE: HMA), Universal Health Services, Inc. (NYSE: UHS), LifePoint Hospitals, Inc. (NASDAQ: LPNT), and Community Health Systems Inc. (NYSE: CYH).

The HCA IPO came after it was quite clear that the brunt of the health care reforms passed into law last year would fall on insurers, not providers. But the fee-for-service system, on which hospital profits are based, are going to be revamped as well over the next several years. Because HCA employs relatively few physicians, it will have to begin hiring doctors in order to take advantage of some of the reform act’s new payment structure.

The company’s structural inadequacies were known and even referred to in the IPO prospectus. Perhaps they were not sufficiently considered by investors, but that’s a long term story.

HCA’s earnings report does note a drop in the complex surgeries that the company has relied on to boost revenues and profits. Instead, hospitals treated less severe cases that are not as costly.

The company also lowered its forecast for growth-adjusted earnings to a range of 3% to 5%, down from a prior estimate of mid-single-digit growth.

HCA should have been able to forecast that its business was going to undergo some change as a result of the health care reforms enacted last year. If insurers are going to pay less, then patients are going to forgo anything except critically needed treatment. It doesn’t take a rocket scientist to figure that out.

HCA, and its underwriters, could have been more explicit in describing the risk related to HCA’s business. Here’s what the prospectus claims:

“During periods of high unemployment, governmental entities often experience budget deficits as a result of increased costs and lower than expected tax collections. These budget deficits at federal, state and local government entities have decreased, and may continue to decrease, spending for health and human service programs, including Medicare, Medicaid and similar programs, which represent significant payer sources for our hospitals. Other risks we face during periods of high unemployment include potential declines in the population covered under managed care agreements, patient decisions to postpone or cancel elective and non-emergency health care procedures, potential increases in the uninsured and underinsured populations and further difficulties in our collecting patient co-payment and deductible receivables.”

That description is so generic that it resembles placebo. Inpatient and outpatient surgeries have been declining slowly since 2006 and reached their lowest point in 2010.

Another weight on HCA is the end of its lock-up period in September, when 383 million more shares of stock will be eligible for re-sale. The company issued around 124 million shares at its March IPO.

Health Management Associates reports earnings tomorrow, and if it has the same issue with surgeries that hit HCA, the whole hospital sector is in for another beating. If HMA avoids the issue, then HCA may fall even further on its own.

HCA shares posted a new post-IPO low of $26.96 in early trading today, but the shares have come back to around $27.89 at mid-day. The post-IPO high is $35.37.

Paul Ausick

Arcos Dorados Holdings Inc. (NYSE: ARCO) Started as Overweight at Morgan Stanley; started as Buy at Citi; Started as Neutral at JPMorgan.
Campbell Soup Company (NYSE: CPB) Raised to Neutral at Credit Suisse.
Carrizo Oil & Gas Inc. (NASDAQ: CRZO) Raised to Outperform at Wells Fargo.
Chimera Investment Corporation (NYSE: CIM) Cut to Hold at Jefferies.
Community Health Systems. Inc. (NYSE: CYH) Reinstated as Outperform with $35 target at Credit Suisse.
East West Bancorp, Inc. (NASDAQ: EWBC) Cut to Neutral with $21 target at Credit Suisse.
Energy Conversion Devices, Inc. (NASDAQ: ENER) Cut estimates and target to $1.50 at Credit Suisse.
Ferrellgas Partners (NYSE: FGP) Maintained Underperform as Bear of the Day at Zacks.
Hewlett-Packard Co. (NYSE: HPQ) Cut to Equal-Weight at Morgan Stanley.
Humana, Inc. (NYSE: HUM) Maintained Outperform as Bull of the Day at Zacks.
KBR INc. (NYSE: KBR) Added to Goldman Sachs Conviction Buy List.
Mosaic Co. (NYSE: MOS) Reinstated as Outperform with $85 target at Credit Suisse.
Mylan Laboratories Inc. (NASDAQ: MYL) Raised to Buy with $29 target at Argus.
Pan American Silver Corporation (NASDAQ: PAAS) Maintained Strong Buy as Value at Zacks.
Salesforce.com (NYSE: CRM) Raised to Overweight at Morgan Stanley.
Tenet Healthcare Corporation (NYSE: THC) Reinstated as Outperform with $7.50 target at Credit Suisse; Started as Neutral at BofA/ML.
Zipcar, Inc. (NASDAQ: ZIP) Started as Outperform with $30 target at Oppenheimer; Started as Neutral at Goldman Sachs.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Hewlett-Packard (NYSE: HPQ) was savaged by the press as information from its CEO about its weak quarterly numbers and future prospects were leaked to the press.

The Flame Index started as a research tool in 2008 at the NY Innovation Design Lab (nyidlab). It was used as a general metric to evaluate companies and their risk in the media. Publicly traded Fortune 500 companies are used as a measure to calculate an overall market of negative news and the companies are ranked within that market.

Data and ranking provided by the Flame Index.

H&R Block (NYSE: HRB) was punished because of concerns about it former subprime portfolio. Systemax fired one of its division executives who was involved in a scandal. Quest Diagnostics paid $211 million to settle a suit which claimed it over-billed customers.

The Flame Index started as a research tool in 2008 at the NY Innovation Design Lab (nyidlab). It was used as a general metric to evaluate companies and their risk in the media. Publicly traded Fortune 500 companies are used as a measure to calculate an overall market of negative news and the companies are ranked within that market.

Data and ranking provided by the Flame Index.

We have given much more detail on these individually and we have outlined specifics on each.  In some cases, we have even included what the expected impact could be to the shares if it is a price-changing event. 

We created a separate detailed earnings calendar with full previews already and that can be accessed.  We also have to watch for key inflation data this week as outlined in our economic summary for the key issues to watch this week from government scores on economic data.  Also, here is a list of the Top 7 Analyst Calls of Last Week with big predictions or controversial calls.

American International Group Inc. (NYSE: AIG) was highlighted in Barron’s as a “Moment of Truth” due to the current share sale that has run into issues.  The Treasury wants closer to current prices, but investment bankers think more of a discount has to be offered due to the dilution.  Consider this the second week of a five or six-week ordeal.

Ancestry.com Inc. (NASDAQ: ACOM) is expected to have its secondary price this week, perhaps Tuesday) for 3.75 million shares.  At $40.95 on Friday, this one has a 52-week range of $15.23 to $45.79. Keep in mind that this is from selling holders rather than from the company, but the company did commit to buying $25 million of its stock directly from the holders as part of its $125 million share buyback plan.

Bank of America Corporation (NYSE: BAC) may offer more light on its dividend and on its mortgage putback fears as its annual meeting is Wednesday.  Shares have not been holding up well, particularly when you consider that Bank of America is now well under its book value.

Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B) turned in its official earnings for the first quarter on Friday and the $966 EPS per A-Share was under a $1,149 per share consensus from Bloomberg.  This was in the news, but we already knew that the net income was going to be stunted due to losses from natural disasters in its insurance operations.  The data had mostly been released the weekend before at the Annual Shareholder Meeting.

BioMimetic Therapeutics Inc. (NASDAQ: BMTI) is rather small at $371 million in market cap and it is by and large at the pre-revenue stage.  It is also thinly covered by analysts. This coming Thursday will begin a FDA Advisory Panel meeting with a consideration for the company’s new bone graft product.

Data and ranking provided by the Flame Index.

Where the deal gets a bit convoluted is that this offer is “the best and final offer based on information currently available.”  

Community Health also said that it if Tenet does not begin good-faith discussions for a merger by 6:00 PM EST on May 9, 2011, then this new offer will expire and the company will also withdraw its proposed nominees it wanted elected to Tenet’s Board of Directors.

This is now called a 69% premium to the unaffected stock price when Community Health made its offer public. What is interesting is that Tenet holders and M&A speculators had always treated this as though a higher price was coming.  The current belief is that Tenet will reject this offer as well.

Tenet shares closed at $6.93 on Friday against a 52-week range of $3.92 to $7.70.  The pre-market trading indication have Tenet shares down over 7% at $6.42 on more than 4 million shares.  Community Health shares closed at $30.73 on Friday and we have yet to see any real moves in the shares.

JON C. OGG

Berkshire Hathaway (NYSE: BRK.B) took a big hit in the news as shareholders sued over Sokol trades in Lubrizol. American Electric Power and NRG both pulled bad press over nuclear power facilities. Harley Davidson was hammered by the press because of bad earnings

The Flame Index started as a research tool in 2008 at the NY Innovation Design Lab (nyidlab). It was used as a general metric to evaluate companies and their risk in the media. Publicly traded Fortune 500 companies are used as a measure to calculate an overall market of negative news and the companies are ranked within that market

Data and ranking provided by the Flame Index.