Deere (DE) is recently up 6% after the U.S. lowered its outlook for corn and wheat production. Call option volume of 21K contracts compares to put volume of 19K contracts. October put option implied volatility is at 29, November is at 32, December is at 33, verses its 26-week average of 35, according to Track Data, suggesting decreasing price movement.

CSX Corp. (CSX) is expected to report Q3 EPS on October 13. October put option implied volatility is at 37, January is at 33, near its 26-week average, according to Track Data, suggesting nondirectional price risk.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Analyst Upgrades

• Wells Fargo upgraded Accenture (ACN) to outperform from market perform following the company's Q4 results, citing improved tone and increased visibility. The firm raised its target range for shares to $51 to $53 from $41 to $44.
• Macquarie upgraded FirstMerit (FMER) to outperform from neutral and has a $21 price target on the stock. The firm cites FirstMerit's strong fundamentals and competitive advantage for the upgrade.
• Macquarie transferred coverage on Marshall & Ilsley (MI) with a neutral from an underperform based on improved risk/reward.
• Eaton (ETN) was upgraded to overweight from neutral at JPMorgan.
• HSBC (HBC) was upgraded to conviction buy from buy at Goldman.
• Walgreen (WAG) was upgraded to overweight from equal weight at Morgan Stanley.

M & A. That's mergers and acquisitions. They're all over the financial pages. Intel (INTC) is buying Infineon's wireless division for $1.4 billion so the chip manufacturer can diversify beyond computers. HP (HPQ) or Dell (DELL) will end up with 3PAR, a cloud-computing company, at a cost of $2 billion or more. Carl Icahn, the billionaire financier, is making a hostile tender bid for Lions Gate (LGF), the film and television producer. 3M (MMM) is buying Attenti Holdings, an Israeli maker of remote monitoring technology used to track people, for $230 million. Exelon (EXC) is picking up a division of Deere (DE), a renewable energy unit, for about $900 million so it can enter the wind-power segment. Sanofi-Aventis (SNYNF) is trying to buy Genzyme (GENZ) but the board won't accept the bid of $18.5 billion. The board is open to better numbers. There are many more.

Is all this good for investors? Or is there some bad in there?

Early Tuesday morning, tractor titan Deere & Co. (DE) announced that it will sell its wind energy business to a subsidiary of Exelon (EXC). The sale of John Deere Renewables will net the firm $900 million and will allow DE to turn its focus back to producing farm equipment.

Back in February, the company was looking at different options for its Renewables arm. DE will lose a bit of money in the exchange, as it invested roughly $1 billion in wind energy products during the past five years.

Deere & Co. (DE) announced stellar earnings for its fiscal third quarter, but a lackluster fourth quarter forecast caused Wall Street to take its eye off of the longer-term picture for the stock.

Deere reported that third-quarter earnings jumped 47% to $617 million, or $1.44 a share -- which is up from 99 cents a share in the year-earlier period -- while revenue rose 16% to $6.84 billion. Analysts were expecting earnings of $1.24 per share and $6.52 billion in revenue.

Unfortunately, this news was overshadowed by the company's announcement that there has been a "sharp downturn" in European sales.

Here's why I think that won't matter so much in the future.

Analyst Upgrades

• Canaccord upgraded Whole Foods (WFMI) to buy from hold based on the company's solid growth outlook. The firm has a $49 target on the stock.
• Bernstein upgraded Mylan (MYL) to outperform from market perform, citing valuation and expectations that its generic business will grow over then next two years. The firm has a $22 target on the stock.
• Jefferies upgraded Omega Healthcare (OHI) to buy from hold with a $26 target based on the company's earnings outlook, valuation and upside from its SNF portfolio.
• Procter & Gamble (PG) was upgraded to buy from hold at Argus.
• Ryland Group (RYL) was upgraded to buy from hold at Deutsche Bank.
• Deere (DE) was upgraded to buy from neutral at Longbow.

"Technically, Deere & Co. (DE) is in a 17-week flat base; the stock has now pushed toward the top of the base as in position to breakout at any time; with earnings growth to accelerate the next two quarters, we have has high expectations for a breakout," says Leo Fasciocco.

The technical "breakout" specialist and editor of The Ticker Tape Digest explains, "The company makes farm and turf equipment, and related service parts. The construction and forestry sells machines and parts used in construction, earthmoving, material handling and timber harvesting.

"DE's long-term chart shows the stock climbing from 28 in 2005 to a peak of 94 during that bull market phase. The stock then made the round trip during the following bear market.

Someone has to build the foundation for an economic recovery, and Caterpillar (CAT) has all the right tools to do so.

As the economy continues to recover and governments and corporations begin to rebuild, investment in heavy machinery is picking up.

On Friday, Caterpillar reported that the company's machine sales rose worldwide for the first time since late 2008, growing 11% from the same year-ago period ending in May. Asian sales led the way with an increase of 38%, but North America wasn't too far behind with gains of 15% over last year. Unfortunately, sales in Europe declined by 8%.

Analyst Upgrades

• UBS upgraded JPMorgan (JPM) to buy from neutral and has a $50 price target on the stock. The firm cites valuation for the upgrade.
• Morgan Joseph upgraded Deere (DE) to buy from hold, citing strong U.S. demand for combines and tractors, favorable fundamentals in Brazil, and expectations for improved domestic construction-equipment demand. The firm has a $75 price target on the stock.
• Wells Fargo upgraded Venoco (VQ) to outperform from market perform to reflect increased confidence in the company's Monterey Shale potential.
• GlaxoSmithKline (GSK) was upgraded to buy from hold at Jefferies.
• Tenet Healthcare (THC) was upgraded to positive from neutral at Susquehanna.
• Agnico-Eagle (AEM) was upgraded to outperform from sector perform at RBC Capital.

Below are some highlights from this past week's earnings coverage on BloggingStocks. Click through to the original posts for more details.

• Abercrombie & Fitch Co. (ANF) shares sold off after it posted a narrower Q1 net loss, but same-store sales rose.
• Applied Materials Inc. (AMAT) swung from a year-ago loss to a Q2 profit that was better than expected.
• Deere & Co. (DE) reported better-than-expected Q2 earnings and improved sales, and raised its full-year outlook.
• Dell Inc. (DELL) posted better-than-expected Q1 earnings, but the gross margin was disappointing, and shares fell.
• GameStop Corp. (GME) higher Q1 earnings beat consensus estimates but same-store sales declined.
• Gap Inc. (GPS) said its higher Q1 earnings beat expectations while revenue fell in line with estimates.

This morning, heavy-equipment manufacturer Deere & Co. (DE) announced that its second-quarter earnings increased 16% as a result of improving sales of farm and construction equipment.

Deere earned $1.58 per share during the quarter, excluding a charge related to health care legislation. Including the charge, the company earned $1.28 per share, topping last year's same-quarter results of $1.11 per share and the consensus estimate of $1.09 per share. Quarterly revenue checked in at $7.13 billion, 6% better than a year earlier and better than the consensus estimate.

U.S. stock futures fell sharply Wednesday, indicating Wall Street was set to open lower, following European markets' drop. Investors worried about financial regulations stemming from Germany's announcement of restrictions on short sales and awaited more data due today.

Germany announced late Tuesday new curbs on traders, suspending so-called naked short-selling of eurozone government bonds and ten key German financial institutions until March 31. The unilateral move is an attempt to shore up the euro and prevent the continent's debt crisis from getting out of control. The European Commission said Wednesday that EU countries should act jointly to regulate so-called naked short-selling of shares and investments to reduce volatilty in financial markets.

Some amazing information has come to light regarding AT&T (ATT), Verizon (VZ), Caterpillar (CAT) and Deere & Co. (DE). It would seem that these companies (among a host of others, I'm sure) have initially determined that dropping health coverage for employees could significantly benefit their bottom lines, and thus benefit investors.

No Surprise Here

As reported by CNNMoney.com, when the health reform bill finally received the president's signature, many large companies began to assess the potential costs of the legislation. At the same time, much was made of the large write-downs that companies took in reaction to changes brought on by the new law.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Apollo Group Inc. (APOL) second quarter EPS guidance fell short of analysts' estimates, sending shares lower.
• CBS Corp. (CBS) higher Q4 earnings were in line with analysts' expectations but free cash flow declined.
• Deere & Co. (DE) posted higher Q1 earnings that easily topped expectations, sending shares sharply higher.
• Gap Inc. (GPS) received a downgrade from an analyst that foresees contracting earnings, returns and margins.
• Hewlett-Packard Co. (HPQ) better-than-expected Q1 results were accompanied by a better-than-expected outlook.

Analyst Upgrades

• JPMorgan upgraded Deere (DE) to overweight from neutral and raised its target on shares to $65 from $52. JPMorgan believes the company's fundamentals are improving and sees signs of a recovery in forestry, turf and earth-moving equipment.
• Piper Jaffray upgraded Valmont (VMI) to neutral from underweight on valuation following the company's Q4 results. The firm lowered its target price on shares to $70 from $74.
• Soleil upgraded Group 1 Automotive (GPI) to buy from hold on valuation with a $36 price target. The firm believes negative news flow for Toyota has created an opportunity to accumulate shares.
• Bernstein upgraded Deutsche Telekom (DT) to outperform from market perform.
• Nucor (NUE) was upgraded to neutral from underperform at BofA/Merrill.
• American Eagle (AEO) was upgraded to outperform from market perform at Wells Fargo.