The unofficial closing bells put the DJIA down about 2 points to 12,291.73 (-0.02%), the NASDAQ rose more than 6 points (0.25%) to 2,625.20, and the S&P 500 rose 0.01% or less than 1 point to 1,265.47.

There were several analyst upgrades and downgrades today, including VMWare Inc. (NYSE: VMW) raised to ‘outperform’ at Oppenheimer; Yahoo! Inc. (NASDAQ: YHOO) maintained ‘buy’ with a price target of $18 at BofA/Merrill Lynch; Sony Corp. (NYSE: SNE) Japanese target price cut by Barclays; Electronic Arts Inc. (NASDAQ: EA) maintained ‘buy’ with a $28 price target at BofA/Merrill Lynch; and Sempra Energy Inc. (NYSE: SRE) reiterated as ‘buy’ with a $61 target price at Argus. Delphi Automotive (NYSE: DLPH) received four ratings this morning: initiated as ‘outperform’ at Credit Suisse; started as ‘buy’ at BofA/Merrill Lynch; started as ‘overweight’ at JPMorgan; and started as ‘outperform’ at R.W. Baird.

Here are today’s post-earnings news reactions with prices during the last half-hour of trading: Cal-Maine Foods Inc. (NASDAQ: CALM) is up nearly 5% at $35.84; and DemandTec, Inc. (NASDAQ: DMAN), which is being acquired by IBM Corp. (NYSE: IBM), is down about -0.04% at $13.13. This is the beginning of a very light week for earnings.

Other standouts from today include the following stocks:

Sears Holding Co. (NASDAQ: SHLD) is down about -26% at $33.95, a new 52-week low. The department store has announced that it will miss its previous earnings forecast by at least 50% and that it will close another 100-120 stores. See more coverage here and here.

Computer Sciences Corp. (NYSE: CSC) is down more than -9% at $24.06. The technology and IT services company has said it may have to take a $1.5 billion writedown on a UK contract. More coverage here.

Parlux Fragrances Inc. (NASDAQ: PARL) is up more than 72% at $5.98, after posting a new 52-week high this morning of $6.60. The perfume maker is being acquired by Perfumania Holdings Inc. (NASDAQ: PERF) for about $170 million.

Whirlpool Corp. (NYSE: WHR) is down more than -8% at $46.95. The appliance maker, which makes products for Sears, is caught in that company’s dismal announcement.

Magnum Hunter Resources Corp. (NYSE: MHR) is up nearly 19% at $5.54. The oil & gas producer has raised its production estimate from 10,000 barrels/day of oil equivalent to 12,500 barrels/day.

Stay tuned for Wednesday. Here are the noteworthy events on the schedule (all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications
11:30 a.m. – Four-week T-bill auction

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Paul Ausick

CF Industries Holdings Inc. (NYSE: CF) named as value stock of the day by Zacks Investment Research.
Delphi Automotive (NYSE: DLPH) Initiated as Outperform at Credit Suisse; Started as Buy at Bank of America Merrill Lynch; Started as Overweight at J.P.Morgan; Started as Outperform at R.W. Baird.
Electronic Arts Inc. (NASDAQ: EA) Maintained Neutral with $28.00 price target at Bank of America Merrill Lynch.
Estee Lauder Companies (NYSE: EL) raised to Outperform as Bull of the Day by Zacks Investment Research.
McKesson Corp. (NYSE: MCK) Reiterated Hold at Argus.
RadioShack Corporation (NYSE: RSH) Cut to Underperform as Bear of the Day by Zacks Investment Research.
Sempra Energy (NYSE: SRE) Reiterated Buy with $61 price target objective at Argus.
Sony Corporation (NYSE: SNE) target cut in Japan by Barclays.
Teradata Corporation (NYSE: TDC) added to US 1 focus list at Bank of America Merrill Lynch.
VMware Inc. (NYSE: VMW) Raised to Outperform at Oppenheimer.
Yahoo! Inc. (NASDAQ: YHOO) Maintained Buy with $18.00 price target objective at Bank of America Merrill Lynch.

Read Also: Credit Suisse’s Small Cap Sweet Spots With 50% Upside

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JON C. OGG

Falling prices have been punishing the industry, and other low-cost Chinese providers like Trina Solar Ltd. (NYSE: TSL), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), Suntech Powsr Holdings Co. Ltd. (NYSE: STP), and LDK Solar Co. Ltd. (NYSE: LDK) have taken a beating. Higher priced makers like SunPower Corp. (NASDAQ: SPWRA) are getting even more punishment. Solyndra is in bankruptcy now because it could not get its cost structure in line with the collapse in panel pricing.

The lower prices have had the expected effect though. Even as countries have lowered solar subsidies, falling panel prices have kept demand reasonably high because the cost of installing solar is reaching a point where it is price-competitive. Firms like First Solar, SunPower, MEMC Electronic Materials Inc. (NYSE: WFR) that have acquired project development companies are able to cope better with the decline in panel prices because they have both a captive and growing market.

There’s little argument that the falling price of modules have extended the market for solar PV, which is why the trade case filed by SolarWorld and the unnamed US solar panel makers is getting no support from firms like First Solar, SunPower, or MEMC. In fact, a rival group, called CASE, the Coalition for Affordable Solar Energy, has been quickly put together to fight against the SolarWorld-led trade case.

Their argument is that falling prices for solar modules have brought solar generation prices down to near grid parity with coal and natural gas generation. Slapping a tariff on solar panels will essentially kill the gains made by the industry. In fact, a Chinese solar project developer has said that a 30% tariff on imported solar panels will make uneconomic $500 million in new solar developments the company has planned in the US.

US energy company Sempra Energy (NYSE: SRE) is building a 700-megawatt solar farm project near Phoenix that will use 200 megawatts of panels from Suntech. If the trade case is decided in favor of SolarWorld, panels from US makers like First Solar could be substituted, but the entire cost of the project would rise, changing the power purchase agreement that is the basis for the project and, ultimately perhaps, making the project uneconomic. The loss of the installation jobs would cost the US economy more than it would gain from having a US maker supply the panels. US makers build most of their panels overseas anyway.

SolarWorld is the largest maker of solar panels in the US, and employs about 1,300 workers at its plant near Portland, Oregon. A grand total of all US workers involved in making solar panels for distribution and sale could not exceed 3,000, while more than 52,000 US jobs are supported by solar installers. In terms of US job creation, the numbers support low-cost modules and high installation counts.

That JinkoSolar or some of the other solar makers may go bust is a near certainty. There are too many makers with too much capacity all angling for too few projects. But as module prices continue their decline, it becomes unnecessary for governments to subsidize more solar installations and more solar projects are very likely to make it off the drawing board.

One solar industry official (from a project installer) has likened the fight over dumping to a circular firing squad, where everyone is going to take some hits. The survivors will be those who bleed the least.

Paul Ausick

The loans approved yesterday include a $737 million guarantee to privately held SolarReserve LLC, a joint venture between United Technologies Inc. (NYSE: UTX) and private  equity firm US Renewables Group. The second approval, for $337 million, was awarded to Sempra Energy (NYSE: SRE), which plans to use solar panels manufactured in Arizona by China’s Suntech Power Holdings Co. Ltd. (NYSE: STP).

To date the US DoE has invested some $40 billion in 40 clean energy projects, including solar PV and solar thermal, geothermal, wind, and a new nuclear power plant. First Solar Inc. (NASDAQ: FSLR) lost a $1.9 billion federal guarantee for its Topaz project when it apparently let its application lapse as it negotiates a deal for private capital.

SolarReserve’s Crescent Dunes project is a 110-megawatt concentrating solar power tower that will use molten salt as its heat transfer and storage medium. The molten salt allows the plant to store heat generated by the sun during the day and then use the heat at night to generate steam  to produce electricity. The project is expected to employ 600 people during construction and 45 people in permanent positions once the plant is operational. The project is located near Tonopah, Nevada. SolarReserve has a power purchase agreement with NV Energy, Inc. (NYSE: NVE).

Sempra’s Mesquite Solar project is a 150-megawatt solar PV farm located near Phoenix, Arizona. It is expected to provide about 300 construction jobs and will purchase at least a portion of the required panels from the recently opened Suntech manufacturing plant. Sempra has a 20-year power purchase agreement with Pacific Gas & Electric Co.

Of the projects awaiting decisions from the DoE, SolarCity’s $344 million project to install rooftop solar panels on military base housing will not meet tomorrow’s deadline. Two more projects from First Solar remain in the running. Both the 230-megawatt Antelope Valley project, with a conditional guarantee of $680 million, and the 550-megawatt Desert Sunlight project, with a partial guarantee of $1.88 billion, are still in the running. Sunpower Corp. (NASDAQ: SPWRA) is seeking a guarantee of nearly $1.2 billion for its 250-megawatt California Valley Solar Ranch project.

Perhaps the most interesting project remaining in play is Project Amp, a $2.6 billion project to finance solar installations on US commercial and industrial rooftops. The project is owned by ProLogis (NYSE: PLD), and is seeking a guarantee of up to 80% on $1.4 billion in debt financing that is being underwritten by Bank of America Corp. (NYSE: BAC).

It’s also worth noting that tomorrow’s deadline for federal action applies only to so-called Section 1705 projects. Newer technologies like concentrating solar PV fall under Section 1703 of the law and will still be eligible for consideration.

The barometer for solar is often in the Guggenheim Solar (NYSE: TAN) ETF and it is more of an agnostic solar player that wins only if the whole sector (or its largest components) have share gains.  Its shares are up 0.6% at $3.45 today, but shares also hit a new 52-week low of $3.40 and are down from over $9.00.  This has been brutal so far, and things aren’t getting better for the solar makers.

Paul Ausick

Avis Budget Group, Inc. (NYSE: CAR) Reiterated Strong Buy at Zacks.
The Cooper Companies (NYSE: COO) named as Bull of the Day at Zacks.
General Electric Co. (NYSE: GE) Reiterated Neutral and $21 target at BofA/ML.
Melco Crown Entertainment Ltd. (NASDAQ: MPEL) Reiterated Overweight but raised target to $14.50 at Morgan Stanley.
Molson Coors Brewing Company (NYSE: TAP) Cut to Hold at Stifel Nicolaus.
Nokia Corporation (NYSE: NOK) Cut to Hold at Wunderlich.
Republic Airways Holdings Inc. (NASDAQ: RJET) Raised to Neutral at BofA/ML.
Research In Motion Ltd. (NASDAQ: RIMM) Maintained Hold but cut target to $40 at Canaccord Genuity.
Sempra Energy (NYSE: SRE) Cut to Neutral at Goldman Sachs.
Sina Corporation (NASDAQ: SINA) Maintained Outperform but cut target to $128 at Credit Suisse.
Staples, Inc. (NASDAQ: SPLS) called Bear of the Day at Zacks.
Stericycle, Inc. (NASDAQ: SRCL) Raised to Neutral at BofA/ML.
Transocean Ltd. Co. (NYSE: RIG) Raised to Buy at Argus.

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

The ETFs include Utilities Select Sector SPDR (NYSE: XLU), iShares Dow Jones US Utilities (NYSE: IDU), Rydex S&P Equal Weight Utilities (NYSE: RYU), and Ulta Utilities ProShares (NYSE: UPW). The closed-end funds we looked at include Cohen & Steers Utility Fund Inc. (NYSE: UTF), Reaves Utility Income Fund (AMEX: UTG), Wells Fargo Advantage Utilities and High Income Fund (AMEX: ERH), and DNP Select Income Fund, Inc. (NYSE: DNP). The mutual funds we looked included Invesco Utilities Investor (FSTUX), Rydex Utilities (RYAUX), and Franklin Utilities A (FKUTX).

The utilities sector posts a price/earnings ratio of 18.50, higher than the tech, financial, conglomerates, and materials sectors. The sector’s return on equity is the lowest of all but the financial sector, but its dividend yield of 3.94% is higher than any other sector.

Utilities Select Sector SPDR (NYSE: XLU) holds net assets of $4.33 billion and it’s year-to-date return is 6.81%, while its yield is 3.94%. XLU’s three largest holdings are Southern Company (NYSE: SO) at 8.32.% of assets, Exelon Corp. (NYSE: EXC), and Dominion Resources, Inc. (NYSE: D). The fund’s 52-week range is $27.92-$34.30, and it closed last week at $33.19. Shares are up about 18% in the past 12 months and about 19% from the annual low.

iShares Dow Jones US Utilities (NYSE: IDU) claims net assets of $511 million and its year-to-date return is 7.94%, while its yield is 3.57%. It’s three largest holdings are also Southern Company (6.39%), Exelon, and Dominion. The fund’s 52-week range is $67.94-$84.54, and it closed last week at $81.85. Shares are up nearly 20% in the past 12 months, and about the same from the annual low.

Rydex S&P Equal Weight Utilities (NYSE: RYU) has net assets of $24.5 million, and its year-to-date return is 7.48%, while its yield is 3.27%. Its top three holdings are Constellation Energy Group, Inc. (NYSE: CEG), which is being acquired by Exelon, at 2.7% of total assets, NRG Energy, Inc. (NYSE: NRG), and NiSource Inc. (NYSE: NI). RYU also includes some communications stocks, such as MetroPCS Communications, Inc. (NYSE: PCS) and Verizon Communications (NYSE: VZ). As its name would lead you to believe, its tenth-largest holding accounts for 2.54% of total assets. The fund’s 52-week range is $43.51-$56.28, and it closed last week at $54.47. Shares are up about 24% in the past 12 months and about 25% from the annual low.

ProShares Ultra Utilities (NYSE: UPW) has net assets of $14.45 million, and its year-to-date return is 15.65%, while its yield is 2.32%. Its top three holdings are Southern Company at 5.62%, Exelon, and NextEra Energy, Inc. (NYSE: NEE). The fund’s 52-week range is $32.19-$50.52, and it closed last week at $47.37. Shares are up about 45% in the past 12 months and about 47% from the annual low.

Alexander & Baldwin (NASDAQ: ALEX) Raised to Market Perform at Wells Fargo.
Baidu Inc. (NASDAQ: BIDU) Cut to Neutral at Mizuho (overseas).
CenterPoint Energy Inc. (NYSE: CNP) Reiterated Buy with $20 target at Argus.
DCP Midstream Partners, LP (NYSE: DPM) Started as Outperform and $45 target at Credit Suisse.
Fuel Systems Solutions, Inc. (NASDAQ: FSYS) Reiterated Underperform at BofA/ML.
Goldman Sachs Group Inc. (NYSE: GS) lowered estimates but maintained $190 price target by Credit Suisse.
Las Vegas Sands Corp. (NYSE: LVS) Raised to Buy at Stifel Nicolaus.
Morgan Stanley (NYSE: MS) Added to Focus List at Credit Suisse.
Mosaic Co. (NYSE: MOS) Cut to Sector Perform at Scotia.
Red Hat Inc. (NYSE: RHT) Reiterated Buy and target raised to $57 at BofA/ML.
Sempra Energy (NYSE: SRE) Reiterated Buy with $61 target at Argus.
StanCorp Financial (NYSE: SFG) Cut to Underperform as Bear of the Day at Zacks.
STR Holdings, Inc. (NASDAQ: STRI) Cut to Sell at Auriga.
Tractor Supply Company (NASDAQ: TSCO) Reiterated Buy and raised target to $65 at BofA/ML.
Urban Outfitters Inc. (NASDAQ: URBN) Maintained Buy with $40 target at BofA/ML.
Whole Foods Market, Inc. (NASDAQ: WFMI) Reiterated Outperform as Bull of the Day at Zacks. 

You can 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

It would be well to keep this in mind as press releases burn up pixels announcing new solar plants. This morning, for example, First Solar Inc. (NASDAQ: FSLR) and Southern California Edison, a division of Edison International (NYSE: EIX) announced the signing of a 25-year power purchase agreement for 250 megawatts of electricity from a new solar photovoltaic plant to be built in southern Nevada. Last week, a division of Sempra Energy (NYSE: SRE) signed on for 150 megawatts of solar PV from Suntech Power Holdings Co. (NYSE: STP). In January, Southern California Edison signed three power purchase agreements for 711 megawatts of solar PV-generated power with SunPower Corp. (NASDAQ: SPWRA).

These are all significant deals and shouldn’t be ignored. But on a macro level, global supply of solar PV panels, modules, cells, and wafers are expected to far outstrip demand in 2011. Forbes cites an analyst from Morgan Stanley who said in a research note to clients that global shipments should shrink 12% in 2011.  Add to that the analyst’s estimate that supply could reach 30,000 megawatts, nearly double expected demand of 15,500 megawatts. Prices, and margins, will be hit and hit hard.

Morgan Stanley isn’t alone. Investment bank Roth Capital Partners projects demand of 18,000 megawatts of global solar PV demand in 2011, although it sees supply capability of about 21,000 megawatts.  That’s not as much as Morgan Stanley, but will still affect margins. Average selling prices could fall as much as 30% according to Roth, though the bank believes a 15% drop is more realistic.

Chinese banks have agreed to lend more than $25 billion to the country’s solar makers, and the companies are expected to use at least part of the cash to increase capacity. Yingli Green Energy Holding Co. Ltd. (NYSE: YGE), LDK Solar Co. Ltd. (NYSE: LDK), Trina Solar Ltd. (NYSE: TSL), and Suntech have all received loans ranged from $4.4 billion to $8.9 billion.

It’s not like over-supply in the solar PV business is breaking news. The outlook for 2011, among more sober observers, has been lukewarm at best. But the combination of policy decisions to reduce incentives in Germany and Italy and the expected increase in manufacturing capacity can’t seem to overcome the near daily announcements of a new solar plant being built somewhere.

In 2010, some 15,000-17,000 megawatts of solar power are estimated to have been installed, and that pretty much soaked up capacity. Capacity additions even 6,000 megawatts represent a 40% increase in manufacturing capability while installation growth is estimated at no more than 20%. Prices have to fall, and with them revenue and profits.

The moral is earnings reports for the just-completed quarter are not necessarily good predictors of what’s happening in the solar PV market. Most companies will follow MEMC Electronic Materials Inc. (NYSE: WFR) which last week reported better than double fourth quarter revenue and positive earnings. MEMC even boosted its 2011 guidance, but the company has failed to meet EPS expectations, modest as they were, for four consecutive quarters.

With the exception of SunPower, the solar companies are trading down between -1% and -2% this morning. The Guggenheim Solar ETF (NYSE: TAN) is also down about -1%.

Paul Ausick

 
But wait — there’s more. Oxy also announced that it would purchase an additional 13% of the general partner of Plains All American Pipeline, LP (NYSE: PAA), bringing its total stake in the general partner to 35%. Oxy will also acquire from a subsidiary of Sempra Energy (NYSE: SRE) Sempra’s 50% stake in a joint-venture gas-fired power plant in southern California. Finally, the company will boost its dividend by 21%, from $0.38 to $0.46 per quarter, beginning with the April 2011 payment. Whew!

 
The sale of the Argentine assets, coupled with the purchase of the North Dakota and south Texas properties is expected to add a net 6,000 barrels of oil equivalent/day (boepd) to Oxy’s production. Oxy noted that it is giving up about 44,000 boepd by selling the Argentine assets, but eventually gain 50,000 boepd from the acquisitions.

 
The North Dakota properties currently produce about 5,500 boepd, which the company will add to more than 6,000 boepd it produces from other properties in the Bakken’s Williston Basin. Oxy expects to raise production in the Bakken play to “at least” 30,000 boepd in the next five years.

 
The south Texas properties currently produce about 200 million cubic feet per day of natural gas equivalent. Oxy did not say what growth it expected from these properties, but did say that they include “an excellent inventory of drilling opportunities.”
The primary driver for this re-arrangement has got to be Oxy’s effort to boost its reserves and its production growth. The company’s chairman/CEO noted that the acquisitions, combined with others the company has made earlier in the year, will help Oxy meet production growth projections of 5%-8%.

 
According to the company’s 2009 annual report, Oxy added just 92 million barrels of oil equivalent of proved reserves in 2009, mainly in southern California, through new discoveries. Total production in 2009 was 643 million barrels of oil equivalent. Total reserves additions summed to 483 million barrels of oil equivalent. That ratio had to change, and these deals will help do that.
Oxy’s share price is up about 2% in early trading today, at $92.90/share. The stock set a new 52-week high earlier this week when crude prices topped $90/barrel.

 
Paul Ausick

Baidu, inc. (NASDAQ: BIDU) Raised to Buy at Deutsche Bank; Raised to Buy at UBS.
BHP Billiton (NYSE: BHP) Raised to Buy at Canaccord Adams.
China Mobile (NYSE: CHL) Started as Outperform at Bernstein.
China Telecom (NYSE: CHA) Started as Market Perform at Bernstein.
Green Mountain Coffee (NASDAQ: GMCR) Started as Buy at Roth Capital.
Infosys Technologies (NASDAQ: INFY) Raised to Overweight at HSBC.
Rackspace Hosting, Inc. (NYSE: RAX) Started as Outperform at Wells Fargo.
Sempra Energy (NYSE: SRE) Cut to Market Perform at Wells Fargo.
Symantec Corporation (NASDAQ: SYMC) Raised to Outperform at Wells Fargo.
United Parcel Service (NYSE: UPS) Raised to Outperform at RBC Capital and its price target was raised to $72 at Goldman Sachs.
ViaSat (NYSE: VSAT) Cut to Perform at Oppenheimer.

You are invited to join our free daily email distribution list to hear about analyst upgrades and downgrades, day trader and options trader alerts, stock and market rumors, Buffett and guru investor news, M&A and IPOs, and more.

JON C. OGG