The unofficial closing bells put the DJIA down about 11 points to 12,705.41 (-0.09%), the NASDAQ rose more than 11 points (0.4%) to 2,859.68, and the S&P 500 rose 0.11% or nearly 1.5 points to 1,325.54.

There were several analyst upgrades and downgrades today, including Dell Inc. (NASDAQ: DELL) raised to ‘overweight’ at JPMorgan; Edwards Lifesciences Corp. (NYSE: EW) cut to ‘neutral’ at Credit Suisse; AK Steel Holding Corp. (NYSE: AKS) cut to ‘underperform’ at BofA/Merrill Lynch; Steel Dynamics Inc. (NASDAQ: STLD) cut to ‘neutral’ at BofA/Merrill Lynch; and Broadcom Corp. (NASDAQ: BRCM) started as ‘buy’ at Canaccord Genuity.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) is up nearly 24% at $66.30; Education Management Corp. (NASDAQ: EDMC) is down -17% at $21.19; Nasdaq OMX Group Inc. (NASDAQ: NDAQ) is down -0.6% at $24.62; Qualcomm Inc. (NASDAQ: QCOM) is up 2.2% at $60.88 after posting a new 52-week high of $61.93 earlier today; Beazer Homes USA Inc. (NYSE: BZH) is up 3.2% at $3.27; Boston Scientific Corp. (NYSE: BSX) is down -3.9% at $5.85; Brinks Co. (NYSE: BCO) is down -17.5% at $24.43; Diamond Offshore Drilling Inc. (NYSE: DO) is up 0.35% at $63.29; Lear Corp. (NYSE: LEA) is down -1.2% at $42.48; Merck & Co. (NYSE: MRK) is down -0.3% at $38.51; Take-Two Interactive Software Inc. (NASDAQ: TTWO) is down -0.3% at $15.71; and Viacom Inc. (NASDAQ: VIAB) is down -0.9% at $46.53.

Other standouts from today include the following stocks:

Zynga Inc. (NASDAQ: ZNGA) is up nearly 18% at $12.49 after posting a new post-IPO high of $12.91 earlier today. The social games company got a big boost from Facebook’s IPO filing. Our coverage is here.

MediciNova Inc. (NASDAQ: MNOV) is up nearly 31% at $2.47. The company received a favorable patent notice for a multiple sclerosis treatment device.

Response Genetics Inc. (NASDAQ: RGDX) is up more than 27% at $1.50. The drug maker announced the private placement of about 5.3 million shares at $1.50/share, about 28% higher than last night’s closing price.

BioScrip Inc. (NASDAQ: BIOS) is up more than 15% at $6.73. The pharmacy services provider has sold a portion of its assets to Walgreen Co. (NYSE: WAG) for $225 million.

Ur-Energy Inc. (AMEX: URG) is down more than -13% at $1.22. The uranium miner has issued 1.5 million shares of new stock to agents who will attempt to sell at CDN$1.00.

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

• 8:30 a.m. – Non-farm payroll report
• 10:00 a.m. – Factory orders
• 10:00 a.m. – ISM non-manufacturing (services) index

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Paul Ausick

Alkermes, Inc. (NASDAQ: ALKS) Raised to Outperform at Leerink Swann.
American Eagle Outfitters, Inc. (NYSE: AEO) Cut to Neutral at Janney.
Archer Daniels Midland Company (NYSE: ADM) Cut to Underperform at BofA/ML.
BHP Billiton Ltd. (NYSE: BHP) Started as Buy at RBS.
Cisco Systems, Inc. (NASDAQ: CSCO) Started as Buy at boutique firm BGC Financial.
The Dow Chemical Company (NYSE: DOW) Maintained Strong Buy as Value at Zacks.
GAMCO Investors, Inc. (NYSE: GBL) Raised to Buy at BofA/ML.
Illinois Tool Works (NYSE: ITW) Raised to Outperform as Bull of the Day at Zacks.
The Jones Group Inc. (NYSE: JNY) Cut to Sell at Goldman Sachs.
Merck & Co. Inc. (NYSE: MRK) Reiterated Buy and $41 target at Argus.
Philips Electronics NV (NYSE: PHG) Cut to Neutral at JPMorgan.
Quest Diagnostics, Inc. (NYSE: DGX) reiterated Outperform but on Focus List at Credit Suisse.
Regis Corporation (NYSE: RGS) Kept at Underperform as Bear of the Day at Zacks.
Rio Tinto plc (NYSE: RIO) Started as Buy at RBS.
Saks Incorporated (NYSE: SKS) Raised to Neutral from Sell at Goldman Sachs.
Tyson Foods Inc. (NYSE: TSN) Cut to Underperform at BofA/ML.
Viacom, Inc. (NYSE: VIA-B) Raised to Buy at Argus.

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

Arch Coal Inc. (NYSE: ACI) Raised to Buy at Brean Murray; Reiterated Buy at Argus.
Dendreon Corporation (NASDAQ: DNDN) Reiterated Buy at Needham.
Everest Re Group, Ltd. (NYSE: RE) Maintained Underperform as Bear of the Day at Zacks.
General Motors Company (NYSE: GM) Raised to Buy at UBS.
Hercules Offshore, Inc. (NASDAQ: HERO) Raised to Outperform at FBR.
JetBlue Airways Corporation (NASDAQ: JBLU) Reiterated Hold at Argus.
LM Ericsson Telephone Co. (NASDAQ: ERIC) Raised to Neutral at JPMorgan.
Pool Corporation (NASDAQ: POOL) Raised to Outperform as Bull of the Day at Zacks.
Rare Element Resources Ltd. (AMEX: REE) Started as Buy at Dahlman Rose.
U.S. Steel Corporation (NYSE: X) Reiterated Buy at Argus.
Viacom Inc. (NYSE: VIA-B) Raised to Buy at BofA/ML.
VIVUS Inc. (NASDAQ: VVUS) Reiterated Buy at Needham.
Wells Fargo & Co. Inc. (NYSE: WFC) Reiterated Sell at Argus.

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

The deal is a five-year pact that will allow Netflix subscribers to watch Epix partners’ movies through the Netflix streaming web service. Epix will make its new releases and other titles available to Netflix subscribers 90 days after those titles debut on pay-TV and on-demand where the titles generate a higher sale for Epix.  If the L.A. Times is right, this will send about $1 billion in license fees to Epix and its partners over the course of the term.

Netflix has been one force in killing Blockbuster along with a slew of other factors.  There is also competition that the company faces.  Coinstar Inc. (NASDAQ: CSTR) has the Redbox video rental service that is located in grocery stores and other settings.  While Coinstar was hit on its growth rates, these boxes are a threat as newer boxes can hold more titles.

The move to streaming video and higher postal rates in 2011 and beyond may also increase its operating costs and lower the margins as the company has a hard time passing on higher costs. More than 60% of customers have opted for a streaming service according to the company.  Netflix also seems to have more demand for its lower-priced service over the premium service, and that means that Netflix will have to add even more and more subscribers to keep up with growth targets.

Despite a continually surging membership growth, Netflix is unlikely to be able to continually add subscribers.  As with all high growth stories, there is only so much market penetration that can occur.  It is a great service and it also has many addicts.

Netflix shares are down 2.25% at $114.25 right after the open, although it is worth noting that this is already more than $1.00 above the early trading lows of $113.20.

JON C. OGG

Time Warner and Viacom are particularly well matched. Each has a movie studio, and the flagship businesses of both companies are extremely successful cable channels.

Viacom’s cable content brands include MTV, Spike, Comedy Central, VH1, and Nickelodeon. In the quarter ending September 30, Viacom’s Media Networks business had revenue of $2.1 billion and operating income of $773 million. During the same period, Time Warner’s Networks operation which includes HBO, Turner, and CNN had revenue of $2.9 billlion and operating income of $938 million.

The Time Warner movie studio operation which includes Warner Bros. had revenue of $2.8 billion and operating income of $291 million in the last reported quarter. Viacom’s film business, which includes Paramount, had revenue of $1.2 billion and operating income of $69 million.

Combining the two companies would increase the sizes of the Time Warner network and studio business and would allow for tens of millions of dollars in annual savings. A merged operation would have quarterly revenue of about $10 billion and operating income of $2 billion (after AOL numbers are backed out), which would probably make the new entity the largest entertainment company in the world.

Viacom has $6.8 billion in long-term debt. Time Warner would probably not eliminate that, but it does have $7.1  billion in cash, mostly from a special dividend related to the spin-off of Time Warner Cable (NYSE:TWC).

Viacom would be expensive. Leaving aside debt, with a 20% premium it current share price Time Warner would probably have to pay $25 billion for the company. Viacom will have net income of only about $1.2 billion, so Bewkes would have to believe strongly in the “synergies” between the two companies, and the power of branding in the long-term value of cable networks.

Cable programming is at the core of Time Warner’s earnings and future success. By buying Viacom, it can double down on that bet. Redstone probably has the power to sell his company without regard for other shareholders. He might even be allowed to stay on as chairman of the merged operation–Time Warner Viacom.

Douglas A. McIntyre

For more 24/7 Wall St. TV visit us here.

Executive Producer: Philip MacDonald

The Wall Street Journal has made the point that Vivendi could walk away from selling its stake and ruin the entire transaction, but it is hard to see what the French company would gain from that.

NBCU will have revenue of just over $15 billion this year and operating income of about $2.4 billion. The company has no debt.  Entertainment giant Viacom (NYSE:VIA.B) has a market cap of $19 billion and debt of nearly $7 billion. Its annual sales are about $14 billion and its operating income was $2.5 billion in 2008. That would make the NBCU valuation in line with a publicly traded company of similar size and business scope.

The real issue with the Comcast plan to take control of NBCU and GE’s desire to divest it is why anyone would assume that the entertainment company will do any better with Comcast management than it has done with GE executives at the wheel. NBCU’s earnings have been in line with the rest of the industry as it has gone through the recession. It has already cut costs and laid off workers. A great deal of its performance relies on the success of it TV ratings and movie box office receipts as its earnings from the Olympics last year show. In short, there is nothing that new management is likely to be able to do to improve results.

There is an odd theory that because Comcast is the largest cable company in the US that it will be able to get more NBCU content to its customers using its broadband and TV delivery infrastructure. That is hardly the case. The federal government will be watching Comcast to make sure it treats other entertainment firms at least as well as NBCU.  Comcast would risk a run-in with antitrust authorities if it acted otherwise.

Many M&A transactions are based on the premise that a new owner can manage a company better than the old one. In the case of NBCU, it is hard to see how that will work.

Douglas A. McIntyre

Abercrombie & Fitch (NYSE: ANF) Raised to Equal Weight at Morgan Stanley.
Cisco Systems (NASDAQ: CSCO) Raised to Outperform at William Blair.
Coca-Cola (NYSE: KO) Raised to Buy at Deutsche Bank.
Goodrich (NYSE: GR) Raised to Outperform at FBR Capital.
Harmony Gold (NYSE: HMY) Raised to Buy at Nomura.
Kohl’s (NYSE: KSS) Raised to Overweight at Morgan Stanley.
News Corp (NWS-A) Raised to Buy at BofA/Merrill Lynch.
The Walt Disney Co. (NYSE: DIS) Raised to Neutral at BofA/Merrill Lynch.
Viacom B (VIA-B) Raised to Neutral at BofA/Merrill Lynch.

You can join our open email distribution list which goes out several times per week for reminders of the top day trader alerts, analyst upgrades and downgrades, IPO’s, key secondary offerings, guru investor data on Buffett and others, mergers, and more.

JON C. OGG