Bank of America Corp. (NYSE: BAC) was cut to Market Perform from outperform at KBW.

Bed Bath & Beyond Inc. (NASDAQ: BBBY) was cut to Hold from Buy at Jefferies.

BlackRock Inc. (NYSE: BLK) was cut to Market Perform from Outperform at KBW.

Brinker International Inc. (NYSE: EAT) was cut to Market Perform from outperform at Wells Fargo.

Charles Schwab Corp. (NYSE: SCHW) was cut to Underperform from Market Perform at KBW.

Kansas City Southern Corp. (NYSE: KSU) was cut to Sell from Hold at Stifel Nicolaus.

Leap Wireless Inc. (NASDAQ: LEAP) was cut to Sell from an already cautious Hold rating at Deutsche Bank.

Lowe’s Companies Inc. (NYSE: LOW) was cut to Perform from outperform at Oppenheimer.

NeuStar Inc. (NYSE: NSR) was cut to Neutral from Buy at Goldman Sachs.

Red Hat Inc. (NYSE: RHT) was cut to Market Perform from Outperform BMO Capital.

Ruby Tuesday Inc. (NYSE: RT) was cut to Market Perform from Outperform at Wells Fargo.

SanDisk Corp. (NASDAQ: SNDK) was cut to Neutral from Buy at Nomura.

TD Ameritrade Holding Corp. (NYSE: AMTD) was cut to Underperform from Market Perform at KBW.

See also: Top Analyst Upgrades and Positive Calls This Monday

The question that remains is where will the growth stay going forward, and which companies will be the leaders. The revised coverage is based primarily on a raised view for memory (DRAM) and wireless semiconductors, while the non-memory estimate for 2013 growth of +2.5% is more cautious.

What this means for investors is that UBS expects semiconductor sales growth to trough in this quarter and to peak by the first quarter of next year, still leaving some time for stocks to outperform. However, unless end-demand significantly improves, they believe we are at the stage in the cycle where investors have to become increasingly more selective. Their list of stocks to buy reinforces the selectivity angle.

Avago Technologies Ltd. (NASDAQ: AVGO) is a leading supplier for Apple Inc. (NASDAQ: AAPL) and has more than $1 billion of net cash on its balance sheet. The UBS price target for the stock is $42. The Thomson/First Call estimate is at $42 as well. Investors receive a 2.20% dividend.

Broadcom Corp. (NASDAQ: BRCM) is another big supplier to smartphone manufacturers. Broadcom supplies big clients like Apple with high-tech chips that integrate various functions, and it has recently attained several other major customers like Samsung and Nokia. The UBS target for the stock is $45. The consensus is at $40. Shareholders are paid a 1.20% dividend.

Linear Technology Corp. (NASDAQ: LLTC) reported third-quarter 2013 earnings that were in line with the consensus estimates. The weaker-than-expected revenue guidance may indicate limited growth prospects in several important markets, such as communications infrastructure and computing. UBS has a target for the stock of $40, while the consensus estimate is $35. Investors are paid a 2.70% dividend.

Maxim Integrated Products Inc. (NASDAQ: MXIM) is expanding its product portfolio to sensors, motion control and other areas of smartphones, tablets and hybrid devices, which will increase its dollar content per device. The UBS price objective for the stock is $37 and the consensus target is $36.05. Shareholders receive a 3.00% dividend.

Microchip Technology Inc. (NASDAQ: MCHP) is the sixth most shorted stock in the NASDAQ 100. Positive results could ignite a rally in the name. UBS has a $40 price target, and the consensus is at $40 also. Investors are paid a solid 3.80% dividend.

Micron Technology Inc. (NASDAQ: MU) is the second largest DRAM manufacturer in the world behind Samsung Electronics. The UBS target for this often volatile name is $12. The consensus is also at $12.

Nvidia Corp. (NASDAQ: NVDA) delivered a profit, beat Wall Street’s expectations and topped the revenue expectations. UBS has a $15.50 price target. The consensus is at $14. Investors are paid a 2.10% dividend.

Qualcom Inc. (NASDAQ: QCOM) has become a top holding for many portfolio managers around Wall Street. Former top Apple executive Jon Rubinstein recently joined the board of directors. The UBS target for this top name is $76. The consensus price objective is also at $76. Investors are paid a 2.20% dividend.

SanDisk Corp. (NASDAQ: SNDK) makes NAND chips through a joint venture with Japan’s Toshiba, which last Wednesday forecast a 34% increase in operating profit for this year, boosted by strong sales of flash memory chips. The UBS target for the stock is $65 and the consensus is at $65.50.

Silicon Laboratories Inc. (NASDAQ: SLAB) finishes up the list of top semiconductor stocks to buy. The company offers broad-based products, which include microcontrollers, clocks and oscillators, digital isolators and related products, touch controllers, proximity and ambient light sensors. The UBS target for the stock is $49. The consensus price objective is also $49.

One bonus for investors is many of the top stocks to buy are dividend-paying stocks, a reasonably new trait for technology stocks. Combining a solid dividend with the growth potential of semiconductor stocks could be a winning combination.

Intel Corp. (NASDAQ: INTC) short interest fell 1% to 233.21 million shares. About 4.7% of Intel’s float is now short.

Advanced Micro Devices Inc. (NYSE: AMD) saw short interest fall by 6% to 96.06 million shares, or 15.9% of the company’s total float.

Qualcomm Inc. (NASDAQ: QCOM) short interest rose by 3.4% to 14.29 million shares, which represents 0.8% of the company’s float.

ARM Holdings PLC (NASDAQ: ARMH) saw a 5.9% rise in short interest to 3.46 million shares, which represents about 0.7% of the firm’s float.

Micron Technology Inc. (NASDAQ: MU) showed a decline of 22.4%% in short interest, to 66.32 million shares, or about 6.5% of Micron’s float.

SanDisk Corp. (NASDAQ: SNDK) saw short interest fall by 16.7% to 7.8 million shares, or 3.2% of the company’s float.

Short interest in Broadcom Corp. (NASDAQ: BRCM) rose by 1.5% to 7.46 million shares. That is 1.5% of the total float.

Marvell Technology Group Ltd. (NASDAQ: MRVL) posted a 2.4% increase in short interest, to 5.6 million shares, or about 1.4% of Marvell’s float.

Nvidia Corp. (NASDAQ: NVDA) short interest rose by 1.8% to 26.52 million shares, about 4.5% of the company’s float.

Texas Instruments Inc. (NASDAQ: TXN) saw short interest decline by 5.9% to 26.5 million shares, or 2.4% of the float.

Applied Materials Inc. (NASDAQ: AMAT) short interest rose by 1.8% to 18.95 million shares, which is about 1.6% of the company’s float.

The Market Vectors Semiconductor ETF (NYSEMKT: SMH) showed a drop of 3.8% in short interest to 9.34 million shares.

Shorts in Texas Instruments got squeezed by the company’s better-than-expected quarterly earnings report and the faint-hearted dropped their positions and likely went looking for a better play.

During the prior two-week period, short sellers added more than 15% to their positions in SanDisk. In the most recent report, more than 16% dropped their short in their short position in the stock. Their timing looks good; SanDisk hit a two-month bottom on May 1 and has been on the rise ever since.

The firm’s checks on DRAM show that supply continues to be constrained as DRAM suppliers have continued to allocate DRAM capacity away from PC-DRAM to Mobile-Server. So even with PC builds being down 15% to 18% month over month for April, PC-DRAM prices were up 2% to 5% for April. The firm thinks PC-DRAM pricing could continue to trend up this quarter. Stern Agee also noted that DRAM inventory at the card OEMs is still fairly low in the five to six week range.

Today’s report also goes into NAND pricing and demand. NAND supply remains constrained and the supply chain has very little incremental capacity coming on. The NAND space has gone through a consumer handset/tablet market for almost six to seven months after holiday builds peaked. NAND pricing has risen substantially in the past six months and Stern Agee thinks that near-term NAND pricing will be stable and that some subsequent NAND pricing actually will strengthen into June and July when some of the iconic tablet and iPhone builds start to ramp up.

Rakesh said, “We believe MLC NAND continues to be in tight supply. Low density NAND pricing has been softer but is also expected to strengthen.” Both SanDisk Corp. (NASDAQ: SNDK) and Micron Technology Inc. (NASDAQ: MU) have Buy ratings at Stern Agee. Micron’s price target from Stern Agee is above average at $12, versus a consensus target price of $11.64. The firm’s SanDisk’s price target is $70, versus a consensus price target of $64.79.

Rakesh said:

Our checks in the Memory supply chain indicate that PC-DRAM supply continues to be constrained. Even with PC builds tracking down 15-20% month over month into April and soft into May as well, PC-DRAM pricing continues to move up. We believe unlike some concerns there is not much DRAM inventory in the channel either. Also NAND supply continues to be constrained and we believe NAND pricing could strengthen in June/July when seasonal consumer phone and tablet builds resume.

Intel Corp. (NASDAQ: INTC) short interest fell 1.4% to 235.47 million shares. About 4.8% of Intel’s float is now short.

Advanced Micro Devices Inc. (NYSE: AMD) saw short interest rise by 10.6% to 102.23 million shares, or 16.9% of the company’s total float.

Qualcomm Inc. (NASDAQ: QCOM) short interest rose by 1.2% to 13.82 million shares, which represents 0.8% of the company’s float.

ARM Holdings PLC (NASDAQ: ARMH) saw an 8% decline in short interest to 3.27 million shares, which represents about 0.7% of the firm’s float.

Micron Technology Inc. (NASDAQ: MU) showed a rise of 9.9% in short interest, to 85.42 million shares, or about 8.4% of Micron’s float.

SanDisk Corp. (NASDAQ: SNDK) saw short interest rise by 15.5% to 9.36 million shares, or 3.9% of the company’s float.

Short interest in Broadcom Corp. (NASDAQ: BRCM) rose by 6.2% to 7.35 million shares. That is 1.4% of the total float.

Marvell Technology Group Ltd. (NASDAQ: MRVL) posted a 7.7% drop in short interest, to 5.26 million shares, or about 1.2% of Marvell’s float.

Nvidia Corp. (NASDAQ: NVDA) short interest rose by 1.8% to 26.52 million shares, about 4.5% of the company’s float.

Texas Instruments Inc. (NASDAQ: TXN) saw short interest increase by 23.2% to 28.17 million shares, or 2.6% of the float.

Applied Materials Inc. (NASDAQ: AMAT) short interest rose by 25.9% to 18.95 million shares, which is about 1.6% of the company’s float.

The Market Vectors Semiconductor ETF (NYSEMKT: SMH) showed a rise of 6.9% in short interest to 9.71 million shares.

Shorts piled back into Texas Instruments during this period, likely not expecting the stock to post a new high following its earnings report earlier this week.

A better short bet was Applied Materials. The maker of equipment used in chipmaking took a dive last week before recovering most of the loss this week. SanDisk’s swing was even larger in the past two weeks. Short interest in both these stocks should drop in the current two-week period.

The U.S. dollar index is trading down 0.14% today, now at 82.563. The GSCI commodity index is down 1.5% at 600.97. WTI crude oil closed up 1.2% today, at $XX a barrel. Brent crude trades 1.77% at $100.39 a barrel. Natural gas is up 4.8% today at about $4.40 per million BTUs, after the weekly storage report showed a smaller-than-expected build in inventories (more coverage here). Gold settled up 0.7% today at $1,392.50 an ounce.

The unofficial closing bells put the DJIA down more than 79 points to 14,539.14 (-0.54%), the NASDAQ fell more than 38 points (-1.20%) to 3,166.36, and the S&P 500 fell -0.67% or more than 10 points to 1,541.63.

There were a several analyst upgrades and downgrades today, including Qiagen NV (NASDAQ: QGEN) started as ‘sell’ at Citigroup; Potash Corp. of Saskatchewan (NYSE: POT) started as ‘overweight’ at HSBC; HollyFrontier Corp. (NYSE: HFC) raised to ‘buy’ at BofA/Merrill Lynch; American International Group Inc. (NYSE: AIG) started as ‘outperform’ with a price target of $50 at BMO Capital Markets; and FedEx Corp. (NYSE: FDX) cut to ‘underperform’ at RBC Capital Markets.

Earnings reports since markets closed last night resulted in some price moves today, including these as of the last half hour of trading: American Express Co. (NYSE: AXP) is up 1.7% at $65.20 (more coverage here); SanDisk Corp. (NASDAQ: SNDK) is down 6.7% at $52.00 (more coverage here); eBay Inc. (NASDAQ: EBAY) is down 5.6% at $52.98 (more coverage here); Kinder Morgan Inc. (NYSE: KMI) is up 0.4% at $37.95 (more coverage here); AutoNation Inc. (NYSE: AN) is up 1.7% at $43.22 (more coverage here); Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) is up 0.3% at $28.09; Morgan Stanley (NYSE: MS) is down 4.7% at $20.47 (more coverage here); Nucor Corp. (NYSE: NUE) is down 0.4% at $XX; Peabody Energy Corp. (NYSE: BTU) is up 8.2% at $20.58 (more coal coverage here); PepsiCo Inc. (NYSE: PEP) is up 2.8% at $81.08 after posting a new 52-week high of $83.44 earlier today (more coverage here); Philip Morris International Inc. (NYSE: PM) is down 2.5% at $91.65 (more coverage here); and Verizon Communications Inc. (NYSE: VZ) is up 3% at $51.01 after posting a new 52-week high of $51.67 (more coverage here).

Before markets open tomorrow morning we are scheduled to hear earnings reports from Advanced Micro Devices Inc. (NYSE: AMD), Capital One Financial Corp. (NYSE: COF), Chipotle Mexican Grill Inc. (NYSE: CMG), E*Trade Financial Corp. (NASDAQ: ETFC), Google Inc. (NASDAQ: GOOG), International Business Machines Corp. (NYSE: IBM), General Electric Co. (NYSE: GE), Honeywell International Inc. (NYSE: HON), McDonald’s Corp. (NYSE: MCD), Rockwell Collins Inc. (NYSE: COL), and Schlumberger NV (NYSE: SLB).

Some standouts among heavily traded stocks today include:

Nokia Corp. (NYSE: NOK) is down 12.6% at $3.13. The mobile phone maker posted weak first quarter results. There’s no mercy in the markets. More coverage here.

Rite Aid Corp. (NYSE: RAD) is up 6.2% at $2.39. The drug store chain accepted the resignation of board member Jean Coutu, who has been reducing his group’s stake in the company. More coverage here.

Apple Inc. (NASDAQ: AAPL) is down 2.7% at $392.06. The tech giant’s shares will close below $400 for the first time in more than a year.

Stay tuned for Friday. Fed Governor Jeremy Stein is giving a speech. There are no other events on tomorrow’s schedule.

Agrium Inc. (NYSE: AGU) was started as Overweight at HSBC.

American International Group Inc. (NYSE: AIG) started as Outperform along with a $50 price target at BMO Capital Markets, representing close to 30% in implied upside from the $38.56 closing price.

ASML Holding N.V. (NASDAQ: ASML) raised to Buy from Hold at Deutsche Bank and shares are indicated up more than 3% in New York while the ADR’s local shares were up as much as almost 5% in Amsterdam trading.

Best Buy Co. Inc. (NYSE: BBY) saw its price target raised to $30 from $24 at Jefferies, with the note being that business is so far tracking in-line or better than expectations.

Holly Frontier Corp. (NYSE: HFC) raised to Buy from Neutral at BofA/Merrill Lynch.

Johnson & Johnson Inc. (NYSE: JNJ) reiterated Buy but the price target was raised all the way up to $96 from $80 by Argus after its earnings report. Outside of the analyst calls, we expect and have projected a dividend hike yet again next week from J&J.

Potash Corp. of Saskatchewan (NYSE: POT) was started as Overweight at HSBC.

SanDisk Corp. (NASDAQ: SNDK) is up marginally after earnings. The flash memory leader was reiterated as Outperform at Credit Suisse, but the firm raised the price target to $75 from $55 as its structural growth is expected to be better than the semiconductor sector.

Textron Inc. (NYSE: TXT) has one analyst defending the stock after a 13.5% drop on Wednesday. J.P. Morgan has raised its rating to Overweight from Neutral and assigned a $30 price target. Shares closed at $25.51 on Wednesday, versus $29.35 the prior day, and its 52-week range is $21.97 to $31.30.

Theravance Inc. (NASDAQ: THRX) is already up 16% or so at $32.50 after positive data on its COPD drug with GlaxoSmithKline, but BofA/Merrill Lynch reiterated a Buy rating and raised its price target to $40 from $34 along with its earnings estimates from 2013 to 2015.

The Travelers Companies Inc. (NYSE: TRV) was started as Outperform with a $95 price target at BMO Capital Markets.

United Parcel Service Inc. (NYSE: UPS) raised to Outperform from Sector Perform at RBC Capital Markets.

See also: Analysts Defend Battered Gold Mining Stocks

The company’s summary was $0.84 EPS and $1.34 billion in revenue versus Thomson Reuters estimates of $0.77 EPS and $1.3 billion in revenue.

We would note that BofA/Merrill Lynch said that SanDisk was going to beat earnings handily and that it sees upside to its $66 price target. It is worth noting that solid-state drive (SSD) products drove 20% of sales in the quarter and SanDisk expects gains in 2013. Cash flow from operations totaled $474 million and its cash and cash-equivalents totaled $6.19 billion in the last quarter.

Be advised that SanDisk did not offer guidance ahead. Without guidance, you should consider this to be unfinished business. SanDisk was down 3% to $55.72 in regular trading and the stock is down close to 5% more while waiting for guidance.

The U.S. dollar index is trading up 1.06% today, now at 82.613. The GSCI commodity index is up 0.2% at 609.91. WTI crude oil closed down 2.3% today, at $86.68 a barrel after small drop in the EIA’s inventory report (more coverage here). Brent crude trades down 2.1% at $100.39 a barrel. Natural gas is up 1.2% today at about $4.19 per million BTUs. Gold settled down 0.3% today at $1,382.70 an ounce.

The unofficial closing bells put the DJIA down nearly 139 points to 14,618.13 (-0.94%), the NASDAQ fell about 60 points (-1.84%) to 3,204.67, and the S&P 500 fell -1.43% or nearly 23 points to 1,552.00.

There were a several analyst upgrades and downgrades today, including Wells Fargo & Co. (NYSE: WFC) reiterated as ‘sell’ at Argus; Lululemon Athletica Inc. (NASDAQ: LULU) started as ‘overweight’ with a price target of $85 at Barclays; Qihoo 360 Technology Co. Ltd. (NYSE: QIHU) started as ‘overweight’ with a price target of $38 at Barclays; Deere & Co. (NYSE: DE) cut to ‘neutral’ at Macquarie; and Gilead Sciences Inc. (NASDAQ: GILD) reiterated as ‘outperform’ and price target raised to $59 at Oppenheimer.

Earnings reports since markets closed last night resulted in some price moves today, including these as of the last half hour of trading: CSX Corp. (NYSE: CSX) is up XX% at $XX (more railroad coverage here); Intel Corp. (NASDAQ: INTC) is up XX% at $XX (more coverage here) United Rentals Inc. (NYSE: URI) is up XX% at $XX; Yahoo! Inc. (NASDAQ: YHOO) is up XX% at $XX (more coverage here); Bank of America Corp. (NYSE: BAC) is up XX% at $XX (more coverage here); and Abbott Laboratories (NYSE: ABT) is up XX% at $XX (more coverage here).

Before markets open tomorrow morning we are scheduled to hear earnings reports from American Express Co. (NYSE: AXP), SanDisk Corp. (NASDAQ: SNDK), eBay Inc. (NASDAQ: EBAY), Kinder Morgan Inc. (NYSE: KMI), AutoNation Inc. (NYSE: AN), Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX), Morgan Stanley (NYSE: MS), Nucor Corp. (NYSE: NUE), Peabody Energy Corp. (NYSE: BTU), PepsiCo Inc. (NYSE: PEP), Philip Morris International Inc. (NYSE: PM), Nokia Corp. (NYSE: NOK), and Verizon Communications Inc. (NYSE: VZ).

Some standouts among heavily traded stocks today include:

Magnum Hunter Resources Corp. (NYSE: MHR) is down XX% at $XX after posting a new 52-week low of $2.43 earlier today. The struggling oil & gas producer fired its auditing firm, PricewaterhouseCoopers, last night after the auditors asked for additional information that might have a material impact on the company’s financial statements.

Apple Inc. (NASDAQ: AAPL) is down XX% at $XX. The tech giant’s shares fell below $400 for a moment today. More coverage here.

Nokia Corp. (NYSE: NOK) is up XX% at $XX. The mobile phone maker reports earnings tomorrow morning, and the struggles at Apple are assumed to be good news for Nokia.

Stay tuned for Thursday. Minneapolis Fed President Narayana Kocherlakota and Fed Governor Sarah Bloom Raskin are giving speeches. We have also noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – New claims for unemployment benefits
• 10:00 a.m. – Philadelphia Fed survey
• 10:00 a.m. – Leading indicators
• 10:30 a.m. – EIA weekly petroleum status report
• 1:00 p.m. – 5-year Treasury Inflation-Protected Securities (TIPS) auction
• 4:30 p.m. – Fed balance sheet and money supply

We would note to readers that SanDisk was included as one of eight stocks projected to beat earnings estimates just last week by the firm.

The first thing we would point out is that SanDisk shares are down 5% at $54.55 in very active pre-earnings trading at mid-day. Today’s call flies right in the face of real weakness in the stock. The market is also weak and the chip sector is weak as well.   BofA is saying that this indicates a mid to up-cycle earnings and the firm is targeting gross margins of 43% and operating margin of 23% along with $0.85 in earnings per share. The firm shows that the consensus estimates are 39% gross margin, 20% operating margin, $1.3 billion in sales, and $0.63 in GAAP earnings per share. The Thomson Reuters consensus shows a consensus of $0.77 EPS.

Today’s analyst call for real upside is due to average selling prices with spot NAND prices above seasonality. Chip supply constraints, low capital spending, and new demand were all cited for solid chip pricing momentum so far in 2013. The team said,

Our estimates are already above consensus but we see even further upside potential to our estimates and consequently, there could be upside risk to our price target of $66. Key data from first quarter results average selling price is the biggest swing factor determining quarterly earnings.” We would point out that the first quarter was also shown as being usually a low season compared to a fourth quarter peak. Perhaps even more important is that the firm pointed out that Samsung’s NAND capital spending increase will not be a big threat as Samsung may accelerate the ramp-up of its new China plant due to better NAND pricing.

While BofA Merrill Lynch may have some keen insight here, we would be quick to point out a couple of issues which support and also go against this upside call in SanDisk. This stock is highly volatile around earnings, and its stick price was only about $1 short of a 52-week high as recently as yesterday. This is also at a time when the stock price is at a 5-year high while other chip companies have been suffering.

The chart is trying to signal a breakout pattern, although the recent pullback might bring some question there. The drop in SanDisk is also on a day where the DJIA is down 1.2% or 169 points and the NASDAQ is down even more by 2.2% or 72 points.

Lastly, the consensus price target from Thomson Reuters on SanDisk’s stock is $58.78, while BofA’s $66 target compares to a street-high target of $70 on the stock. We would pay attention to SanDisk’s guidance more than the past earnings report because that is what has often generated the monumental buzz for traders in past years.