Allison Transmission Holdings, Inc. (NYSE: ALSN) Started as Neutral at Credit Suisse; Started as Neutral at Goldman Sachs; Started as Neutral at Citigroup.

AutoZone Inc. (NYSE: AZO) Raised to Overweight at JPMorgan.

Big Lots Inc. (NYSE: BIG) Cut to Hold at Deutsche Bank.

Check Point Software Technologies Ltd. (NASDAQ: CHKP) Maintained Hold at Argus.

Chipotle Mexican Grill, Inc. (NYSE: CMG) Cut to Neutral on valuation at Credit Suisse; Reiterated Buy with $480 target at Argus.

Citi Trends, Inc. (NASDAQ: CTRN) named Bear of the Day at Zacks.

Demandware, Inc. (NYSE: DWRE) Started as Buy at Deutsche Bank; Started as Outperform at William Blair; Started as Outperform at Oppenheimer; Started as Neutral at Goldman Sachs.

General Electric Co. (NYSE: GE) Reiterated Buy with $22 target at Argus.

Illumina, Inc. (NASDAQ: ILMN) Reiterated Buy with $54 target at BofA/ML.

LinkedIn Corporation (NYSE: LNKD) Started as Overweight at Piper Jaffray.

Pep Boys-Manny, Moe & Jack Inc. (NYSE: PBY) Cut to Sell at Argus.

Rambus Inc. (NASDAQ: RMBS) Raised to Overweight at JPMorgan.

Texas Instruments Inc. (NASDAQ: TXN) Reiterated Buy with $36 target at BofA/ML.

UnitedHealth Group (NYSE: UNH) named Bull of the Day at Zacks.

Xerox Corporation (NYSE: XRX) Reiterated Buy with $13 target at Argus.

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.

Your email address

subscribe

terms and conditions

JON C. OGG

The unofficial closing bells put the DJIA up about 65 points to 13,029.19 (0.5%), the NASDAQ fell more than 7 points (-0.24%) to 3.000.45, and the S&P 500 rose 0.12% or nearly 2 points to 1,378.53.

There were several analyst upgrades and downgrades today, including Bank of America Corp. (NYSE: BAC) cut to ‘sell’ at Credit Agricole; Chesapeake Energy Corp. (NYSE: CHK) cut to ‘market perform’ at Wells Fargo; Boston Beer Co. Inc. (NYSE: SAM) started as ‘neutral’ at UBS; Embraer SA (NYSE: ERJ) cut to ‘neutral’ at Goldman Sachs; and Plains All American Pipeline L.P. (NYSE: PAA) started as ‘overweight’ at Barclays.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: General Electric Co. (NYSE: GE) is up 1.4% at $19.41 (more coverage here); McDonald’s Corp. (NYSE: MCD) is up 0.7% at $95.90 (more coverage here); Kimberly-Clark Corp. (NYSE: KMB) is up 1.6% at $76.50 after posting a new 52-week intraday high of $77.09 (more coverage here); Alaska Air Group Inc. (NYSE: ALK) is down -0.4% at $34.55; Altera Corp. (NASDAQ: ALTR) is down -8.1% at $35.38; Capital One Financial Corp. (NYSE: COF) is up 0.05% at $53.96; Hanesbrands Inc. (NYSE: HBI) is up 11.7% at $30.09 (more coverage here); Sandisk Corp. (NASDAQ: SNDK) is down -12.2% at $35.55 (more coverage here); KeyCorp (NYSE: KEY) is down -0.06% at $7.87; American Electric Power Co. Inc. (NYSE: AEP) is up 1.1% at $38.29; Canadian Pacific Railway Ltd. (NYSE: CP) is up 0.8% at $77.08 (more coverage here); Cell Therapeutics Inc. (NASDAQ: CTIC) is flat at $1.16; and Royal Caribbean Cruises Ltd. (NYSE: RCL) is down -7.8% at $26.61.

We have a preview of next week’s big earnings reports here.

Other standouts from today include the following stocks:

Patriot Coal Corp. (NYSE: PCX) is down -8% at $6.19. The coal miner announced another mine closure today, along with a lowered production estimate. Patriot is scheduled to report earnings after markets close today.

Riverbed Technology Inc. (NASDAQ: RVBD) is down -28.6% at $19.89. The network equipment maker missed earnings expectations. More coverage here.

Rambus Inc. (NASDAQ: RMBS) is down -12% at $4.92. The dhip maker missed EPS estimates today and offered a lower-than-expected forecast.

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

• 11:30 a.m. – 3- and 6- month bill auction

Have a great weekend.

Your email address

subscribe

terms and conditions

Paul Ausick

After the first half hour of trading this morning, Orchard Supply is up 56% at $39.00. The home improvement store, formerly part of Sears Holdings Corp. (NASDAQ: SHLD), held its IPO this morning at $25/share. Trading has been light, with less than 5,000 shares trading hands following the initial offering.

Rambus is up more than 10% at $8.32. Volume is heavy, with about 25% of the daily average already having been traded. The semiconductor intellectual property company has raised its revenue guidance from $66-$71 million to $83 million for the quarter ended in December.

Yingli Green Energy is up nearly 10% at $4.17. Volume is fairly heavy, with about 20% of the daily average already traded. The solar PV maker is getting a bounce from news stories projecting a better quarter for solar makers.

Aveo is down nearly -14% at $14.84. Volume is already 4x the daily average. The pharmaceutical maker reported that its liver cancer drug performed better than a competitor in late-stage trials, but investors were expecting a larger improvement.

James River is up more than 9% at $7.56. Volume is heavy, with 35% of the daily average already having been traded. The coal miner has been undervalued according to some analysts, who expect coal miners to perform well in 2012 compared with alternative energy sources.

Paul Ausick

After the first half hour of trading this morning, SunPower is up nearly 8% at $6.31. Volume has already passed the company’s daily average. The solar panel maker agreed to buy solar company Tenesol from Total SA (NYSE: TOT) for $165 million. SunPower will pay for the acquisition with 18.5 million new shares issued to Total, at a per share price of $8.80, about 50% higher than yesterday’s closing price.

Bioanalytical Systems is up nearly 8% at $1.50. Volume has already doubled the daily average. The biopharmaceutical company reported good earnings earlier this week.

Rambus is up more than 15% at $8.42. Volume is already equal to the daily average. The semiconductor memory chip maker has reached a patent licensing agreement with Broadcom Corp.

Skyline is down more than -8% at $4.30, after posting a new 52-week low of $4.14. Volume already surpasses the daily average. The manufactured home builder has been dropped from the S&P 600 index.

CalAmp is down more than -13% at $4.44. Volume is double the daily average. The wireless technology company reported lower-than-expected earnings this morning.

Paul Ausick

Several other standouts from today are as follows…

Zoll Medical Corp. (NASDAQ: ZOLL) is up nearly 23%, at $43.80. The medical equipment maker beat quarterly earnings estimates and announced a $50 million stock buyback program.

Angie’s List Inc. (NASDAQ: ANGI) is up more than 25%, at $16.32. The company had its IPO today, and shares have risen briskly from the $13 offering price.

Rambus Inc. (NASDAQ: RMBS) is up more than 23%, at $8.78. The company’s shares were torched yesterday following an adverse ruling in a patent case. Today’s comeback will help, though its a long ways back to the $18 level the stock was trading at yesterday morning.

Viasystems Group Inc. (NASDAQ: VIAS) is up more than 22%, at $18.25. The company withdrew a proposed offering of 4 million shares.

Daqo New Energy Corp. (NYSE: DQ) is down about -19%, at $1.82, after setting a new 52-week low earlier today. The company’s CFO will leave the company at the end of this month. Shares fell -3% early this week when the solar PV company missed earnings estimates.

Stay tuned for Friday. New York Federal Reserve Bank president William Dudley is speaking tomorrow morning and Dallas Federal Reserve Bank president Richard Fisher is speaking tomorrow afternoon. Here’s a list of other noteworthy events (all times Eastern):

• 10.00 a.m. – Conference Board index of leading economic indicators

Your email address

subscribe

terms and conditions

Paul Ausick

The largest shareholder in Olympus cuts its position. (Reuters)

Google (NASDAQ: GOOG) launches its new music service. (Reuters)

Germany and France disagree about the role of the European Central Bank in the sovereign debt crisis. (Reuters)

SABMiller expects difficulty with sales due to slow business in the U.S. and EU. (Reuters)

BHP Billiton (NYSE: BHP) lowers its forecasts. (Reuters)

Greece starts talks with private bondholders. (Reuters)

PepsiCo (NYSE: PEP) directors may split the company into separate food and soda operations. (Reuters)

The head of Aol’s (NYSE: AOL) applications group quits. (WSJ)

Europe’s banks may have trouble with capital. (WSJ)

Fitch warns that U.S. banks may be more exposed to the EU debt crisis than expected. (WSJ)

General Electric (NYSE: GE) starts a $1 billion software program to make products and services more efficient. (WSJ)

Rambus (NASDAQ: RMBS) loses a major antitrust case against Micron (NASDAQ: MU) and Hynix. (WSJ)

Fees that Newt Gingrich earned from Freddie Mac have drawn negative media attention. (WSJ)

Demands grow for the ECB to help resolve the eurozone debt crisis. (WSJ)

Sales at Sears Holdings’ (NYSE: SHLD) Kmart and Sears stores hurt by slow remodeling. (WSJ)

Abercrombie & Fitch (NYSE: ANF) hurt by its need to lower prices. (WSJ)

Delphi Automotive sets its share prices at $22. (WSJ)

AMR (NYSE: AMR) and its pilots will return to the bargaining table. (WSJ)

Germany’s public sector lenders downgraded by Moody’s. (WSJ)

China increases its Treasury holdings as some eurozone paper becomes more risky. (WSJ)

A number of alternatives to oil may be lost if the Keystone XL pipeline loses support. (NYT)

Central banks sharply increase gold holdings. (FT)

The U.S.-China Economic and Sec­urity Review Commission says yuan manipulation could undermine the dollar as the world’s currency. (FT)

AT&T (NYSE: T) may sell the Nokia (NYSE: NOK) Microsoft (NASDAQ: MSFT) Windows smartphone. (Bloomberg)

Douglas A. McIntyre

Altera Corporation (NASDAQ: ALTR) Started as Outperform at William Blair.
Annaly Capital Management, Inc. (NYSE: NLY) Started as Neutral at UBS.
Archer Daniels Midland Company (NYSE: ADM) Started as Neutral at Goldman Sachs.
Corning, Inc. (NYSE: GLW) named Bear of the Day at Zacks.
McDonald’s Corporation (NYSE: MCD) Raised to Strong Buy at S&P Equity Research.
Pandora Media, Inc. (NYSE: P) Raised to Overweight at Morgan Stanley.
Patterson-UTI Energy Inc. (NASDAQ: PTEN) named value stock of the day at Zacks.
Pepsico, Inc. (NYSE: PEP) Cut to Hold at Stifel Nicolaus.
Rambus Inc. (NASDAQ: RMBS) Started as Overweight at JPMorgan.
Turkcell Iletisim Hizmetleri AS (NYSE: TKC) Raised to Neutral at Goldman Sachs.
Under Armour, Inc. (NYSE: UA) Started as Buy at Argus.
V.F. Corporation (NYSE: VFC) Raised to Buy at BofA/ML.
VimpelCom Ltd. (NYSE: VIP) Started as Sell at Goldman Sachs.
Xilinx Inc. (NASDAQ: XLNX) Started as Outperform at William Blair.
Youku.com Inc (NYSE: YOKU) Raised to Positive at Susquehanna.

Your email address

subscribe

terms and conditions

Recent patent litigation has been particularly heavy in the mobile phone industry, where Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG), Research in Motion Ltd. (NASDAQ: RIMM), HTC Corp., Samsung Electronics Co. Ltd. (OTC: SSNLF), LG Electronics, Sony Corp. (NYSE: SNE), L.M. Ericsson Telephone Co. (NASDAQ: ERIC), and Nokia Corp. (NYSE: NOK) have filed and counter-filed a stack of lawsuits related to smartphone technology. Eventually the smartphone makers will come to some kind of cross-licensing agreement, but that day could still be a ways off.

A new study by three professors at the Boston University School of Law puts the cost of patent lawsuits at $500 billion in lost wealth to defendants during the 20-year period from 1990 to 2010.  The average lawsuit costs the defendant about $122 million, and the median loss is $20 million. According to the BU study, just 9% of the lost wealth goes to what are politely known as non-practicing entities, NPEs, and more commonly known as patent trolls — the rest simply evaporates as legal fees, costs of lost business, management distraction, and diversion of resources from product development.

The patent trolls often claim that they are providing a service to small inventors by making it possible for the inventors to share in the spoils of patent infringements. Yet the BU study concludes that small inventors typically receive just 2% of the money.

Google’s recent acquisition of Motorola Mobility Holdings Inc. (NYSE: MMI) added 24,500 patents to Google’s arsenal and created speculation that Eastman Kodak Co. (NYSE: EK) and its 1,100 digital imaging patents would be next on the block. Kodak’s portfolio has been valued as high as $3 billion, or nearly 5x the company’s current market cap. Google paid about $500,000 for each of Motorola’s patents, and the consortium of companies that bought Nortel’s 6,000 patents paid $65,000 for each of those.

Patent trolling got more difficult last week, though, with the enactment of the America Invents Act. While most of the attention on the passage of the new patent laws focused on the first inventor issue, the law also changed the way patent actions may be filed.

Under the old law, a plaintiff could round up as many defendants as possible and sue all in a single action. That will no longer be possible. The new law requires that a separate action must be filed against each accused infringer. The economics of filing patent infringement lawsuits has changed dramatically now that a single action cannot include a host of alleged infringers.

The study provides a list of publicly traded NPEs that includes Rambus Inc. (NASDAQ: RMBS), Acacia Research Corp. (NASDAQ: ACTG), Interdigital Inc. (NASDAQ: IDCC), Tessera Technologies Inc. (NASDAQ: TSRA), and Wi-Lan Inc. (NASDAQ: WILN). Of these stocks, Acacia’s shares have surged by 80% since January and Interdigital’s have risen by 40%.

The BU study’s most interesting conclusion is that there is no huge transfer of wealth from defendants to patent trolls. The bulk of the lost wealth is a cost borne by society at large. And the loss shows up in the lack of innovation and new product development.

There are some possible arguments against that conclusion, not the least of which is that there’s no guarantee that companies would spend the lost wealth on innovation instead of extravagant management perks. There’s ample evidence that company management does not always do the right thing.

Paul Ausick

Alcatel-Lucent (NYSE: ALU) was up the most of all networking stocks this year, so it can’t be too shocking to see it whacked yet again.  Shares are down over 12% at $3.11.

Bank of America Corporation (NYSE: BAC) is no surprise and the news is AIG and the bank’s risks to future suits etc… Shares are down 9.3% at $7.42.

Cheniere Energy, Inc. (AMEX: LNG) is one of the still very speculative players and the precipitous drop in nat-gas is not helping a leveraged player today.  Shares are down a whopping 18% at $6.40.

Crude Carriers Corp. (NYSE: CRU) is following is big leg down from Friday and shares are down 15% at $7.01.

DR Horton Inc. (NYSE: DHI) is down 5.1% at $9.87 and the 52-week low is $9.73. When credit gets tighter, how great is it for homebuilders in an already-weak market?  Ditto for all of its peers.

Ford Motor Company (NYSE: F) is down for the risk to U.S. auto sales as the buyers who rely upon credit can easily put off car buying.  Ford is down 6.5% at $10.13… risk of double-digits again? That was a 52-week low today.  General Motors Company (NYSE: GM) is now down 5.5% at $24.86 and shares came within two cents of the post-IPO lows of $24.49 already today.

Freescale Semiconductor Inc. (NYSE: FSL) may be highly diversified, but that is not helping.  It was not exactly on the most solid footing when the IPO came about and shares are down another 9.5% at $10.73 after having hit a new 52-week low of $9.57.

Geron Corporation (NASDAQ: GERN) has no news as the leader in stem cell research, but StemCells Inc. (NASDAQ: STEM) is down almost 17% at $2.16.  Geron shares are down 9.5% at $2.68 today.

Imperial Sugar Co. (NASDAQ: IPSU) lost over half its value on Friday after management just lost all credibility with its discussion about a loss.  The company had just been out pitching its new “alternative sweetener model” rather than just sugar but the damage is extreme now.  Shares are down another 14% at $8.09.

Iridium Communications Inc. (NASDAQ: IRDM) is suffering with the international growth scene now.  How many people need satellite phones if the purses get tightened too much?  Shares are down almost 7% at $7.38.

Nordstrom Inc. (NYSE: JWN) is probably seeing a few less up-sales this week and shares are trading down 5.5% at $41.87 on the day.  That is still well above $the $28.44 low of the last year.

Sirius XM Radio Inc. (NASDAQ: SIRI) is getting unusually punished due to the risks to auto sales being the first economic spot hit.  Who cares if Howard Stern is there or not on a day like today?  Shares are down 7% at $1.68.

Sprint Nextel Corporation (NYSE: S) is down yet again and down another 7.8% at $3.43 in active trading.  We said the worst was not over there just last week and stick by that statement.  It will take a bull market to save Sprint.

VirnetX Holding Corporation (AMEX: VHC) is the patent player that sues companies for royalties. How relevant it is when its “patent partners” are getting whacked so hard is up to.  The market vote is that the model is not relevant as shares are down 15% at $18.71 this morning.  Keep in mind that the 52-week range is $5.65 to $41.77.  Rambus Inc. (NASDAQ: RMBS) is another “patent licensing operation” that is suffering, with shares down 8% at $10.64 and the stock hit a 52-week high of $10.15 today.

Another day of selling as the great flush continues… The good news is only that the bad news is bad enough and it has been bad enough that at some point you have to expect bargain buyers to surface.

JON C. OGG

Shorts has taken a different tack recently. Data from the NYSE and NASDAQ for the period ending July 12 show that short sellers are holding positions in companies that are already in trouble. That list includes AMD (NYSE: AMD), which has not had a CEO for months. Short interest in the chip firm rose 21% to 83.5 million. Shares sold short in Citigroup (NYSE: C), still the financially weakest of the large banks, moved higher by 27% to 52.3 million. The short interest in Bank of America (NYSE: BAC) was up 10% to 108.3 million shares.

GM (NYSE: GM) has been troubled recently as consumer demand for cars and light trucks slackened in June. The trend will continue if unemployment stays high. Shares sold short in the largest car company in the U.S. rose to 52.3 million, up 22%. The retailers that have struggled the most recently are also on the list of most shorted stores. Best Buy (NYSE: BBY) has a short position of 42 million, which is up 18% from the last two week period. Shares short in Office Depot (NYSE: ODP) were higher by 17% to 34.3 million. The short interest in Home Depot (NYSE: HD) were up by 36% to 25.1 million. Home prices are still in free fall, and over 11 million home mortgages are underwater, which leaves their residents with very little capital for home improvement. Shares short in JC Penney (NYSE: JCP) were up by 23% to 28.3 million. The retailer recruited the head of Apple’s store unit, but same-store sales are still poor. The short interest in The Talbots (NYSE: TLB), which is considered the most troubled of the large retailers, was higher by 22% to 25.2 million

Stocks in tech companies that are considered poorly run or that are in businesses with great competition and low margins also made the list of companies with short interest increase. The short interest in Dell (NASDAQ: DELL) rose 28% to 78.9 million shares. Shares short in Aruba Networks (NASDAQ: ARUN) were up 15% to 17.6 million. The short interest in RF Micro (NASDAQ: RFMD) was up 14% to 21.8 million. Shares short in Rambus (NASDAQ: RMBS) 43% to 9.5 million.

Among the most widely traded stocks, the short interest in Intel (NASDAQ: INTC) fell 16% to 94.5 million. Experts may believe that its move into chip for wireless devices will be successful. Shares short in Comcast (NASDAQ: CMCSA) dropped by 18% to 27.0 million. Its takeover of NBCU is in early stages. Shares short in GE (NYSE: GE) fell by 11% to 71.9 million. GE sold its controlling interest in NBCU to Comcast. Shares short in AT&T (NYSE: T) rose 17% to 63 million. Its cellular subscriber growth has slowed recently and regulators have begun to challenge its takeover of T-Mobile.

Data from NYSE and NASDAQ

Douglas A. McIntyre