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Advanced Fibre Communic. (AFCI / Nasdaq)
Lehman Bros
Downgrading our rating to Equal-weight, based solely on valuation. Our price target is $11 per share.

Alcan (AL / NYSE)
Prudential Securities
Cut rating from Buy to Hold. Price target is now $32, from $38, because of slower growth in auto demand.

Alamosa PCS (APS / NYSE)
Salomon Smith Barney
We are lowering our rating on APS to Underperform from In Line, in the context of our Underweight sector rating. We also lowered our tgt to $0.50 from $1.00. APS is managing its network well, but has been hurt by the lower share of quality activations garnered by the overall Sprint franchise.

Chubb Corporation (CB / NYSE)
Bank of America Montgomery
Upgrading our rating to Strong Buy, with a $72 price target. We believe the stock has already priced in all of the issues hanging over the stock. We have a high degree of confidence in our above-consensus 2003 estimates.

H&R Block (HRB / NYSE)
Morgan Stanley Co.
Raising our forward estimates, as mortgage revenue and margins should be very strong. We also assume the company can settle its class-action lawsuits for a reasonably small amount. Reiterate Overweight rating and $45 price target.

H&R Block (HRB / NYSE)
Salomon Smith Barney
We lower our rating to 3H (from 1H) and price target to $42. An adverse ruling in Texas creates substantial litigation uncertainties that are unlikely to be quickly resolved, in our opinion. We believe management's credibility may be diminished with investors. We think a shareholder suit against Block is now also a possible occurrence, the stock has lost $1.7 billion of its value since the litigation was disclosed. The ultimate liability is an unknown at this point; additional cases are outstanding and the Texas case could encourage other litigation

Infineon Technologies AG (IFX / NYSE)
Deutsche Banc Alex Brown
Downgrading our rating to Hold, based on valuation. We believe the stock will remain close to its book value, until the DRAM business shows more sustainable signs of a recovery.

Med-Design Corporation (MEDC / Nasdaq)
Bank of America Montgomery
Downgrading our rating to Buy, due to the company's push-out of its expected earnings ramp. Results and newsflow can only improve from here.

Marsh & McLennan Co's (MMC / NYSE)
Bank of America Montgomery
Downgrading our rating from Buy to Market Performer, based on valuation. The stock is approaching our $50 price target, and do not see many future catalysts.

NCR Corporation (NCR / NYSE)
Salomon Smith Barney
We initiate coverage of NCR with an Outperform rating and $27 target. NCR enjoys significant share in its target markets, but most are replacement markets in the US, W Europe and Japan. Moreover, weak economic conditions and other inhibitors have caused replacement cycles to lengthen near-term.

Northrop Grumman Corp. (NOC / NYSE)
Lehman Bros
Initiating coverage with an Equal-weight rating. We believe the closing of the TRW will release some selling pressure that has been hanging over the stock. Core defense business is the fastest growing in the industry.

Oracle Corporation (ORCL / Nasdaq)
Deutsche Banc Alex Brown
Downgrading our rating to Hold, with a $10 price target. We believe the recent gains have nothing to do with any fundamental improvements. We would expect most software stocks to selloff into weak 2003 guidance.

Oracle Corporation (ORCL / Nasdaq)
Warburg Dillon Read
Oracle made some changes in their North American sales force and there are likely some more to come. We expect management will wait until after the quarter closes before announcing any more changes. There is never a good time for changes in the sales force but this close to the end of the quarter is probably one of the worst times. While you can do everything possible to minimize the impact of the changes, they still frequently affect sales production. Maintain Hold rating.

Philadelphia Consol. Hld. (PHLY / Nasdaq)
Bank of America Montgomery
Upgrading our rating to Buy, with a $42 price target. We believe the company's operating outlook has improved, after meeting recently with senior management. Many competitors have reduced their scale, or exited the business entirely.

Tenet Healthcare Corp. (THC / NYSE)
Salomon Smith Barney
Downgrading shares of Tenet Healthcare to 2S from 1H. Reducing target. Company held 3-hour conference call after close Thursday that was expected to be a clarification call on a reimbursement issue that would be constructive. Instead, management tone, in our view, was decidedly downbeat and noncommittal versus tone of last week and company announced restructuring of management team.

UnitedHealth Group (UNH / NYSE)
Bank of America Montgomery
Upgrading our rating from Market Performer to Buy, with a $104 price target. This is the pullback we have been waiting for. We believe that UNH is well-positioned to continue leading the industry in all fundamental metrics.

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STOCK COMMENTS / EPS CHANGES
Albertson's (ABS / NYSE)
Morgan Stanley Co.
Reducing our EPS estimates to $2.15 in fiscal 2003 and $2.31 for next year. Reiterate Underweight rating, with our new $18 price target.

Costco Wholesale Corp. (COST / Nasdaq)
Salomon Smith Barney
October same store sales rose 2% versus 6% last year, below our expectations for the low-end of the 4-6% range. Despite the sales miss, we believe that gross margins should show slight improvement in 1Q due to more directly sourced merchandise. However, we now believe that SG&A will deteriorate more than expected due to deleveraging of expenses. This has led us to be more cautious with our earnings expectations, which are currently under review.

Dianon Systems (DIAN / Nasdaq)
NEWS
Laboratory Corp. of America agreed to buy the clinical-testing company for $598 million. Laboratory Corp. will pay $47.50 a share in cash, it said in a press release distributed by PR Newswire.

EchoStar Communications (DISH / Nasdaq)
Merrill Lynch
Raising our third quarter subscriber forecasts, because more consumers are moving from cable. At the same time, we are trimming our EBITDA estimate. Maintain Buy rating and $25 price target.

EchoStar Communications (DISH / Nasdaq)
Merrill Lynch
Raising our third quarter subscriber forecasts, because more consumers are moving from cable. At the same time, we are trimming our EBITDA estimate. Maintain Buy rating and $25 price target.

Walt Disney Company (DIS / NYSE)
Salomon Smith Barney
Management indicated EPS growth potential of 20-30% in 2003 leading to $0.66-$0.72 per share, in line with our $0.70 estimate. We believe similar growth could carry into 2004 driving EPS to a $0.79-$0.93 per share range. While the first half earnings may be tempered by elevated sports programming costs, it appears that several businesses are bottoming -- consumer products, ABC and theme parks -- which should drive significant operating leverage. We rate Disney Outperform within the context of our Marketweight-rated Entertainment group with a $25 price target.

FirstEnergy Corp. (FE / NYSE)
Lehman Bros
We expect the company to bring down its full-year guidance by 10-20 cents per share at next month's analyst meeting, because of pension and other expenses. That being said, we find it difficult to find a more attractive name in the sector. Maintain Overweight rating.

Goldman Sachs Group (GS / NYSE)
Deutsche Banc Alex Brown
Lowering our EPS estimates to $3.92 in 2002 and $4.40 for next year. Fourth quarter will especially see a decline in key revenue drivers. Equity underwriting and trading is soft. Maintain Hold rating and $75 price target.

Kroger Company (KR / NYSE)
Morgan Stanley Co.
Cutting our estimates to $1.62 per share in 2002 and $1.70 for next year, because of worsening conditions in the supermarket industry. Maintain Equal-weight rating.

Eli Lilly & Co. (LLY / NYSE)
Credit Suisse First Boston
Taking down our 2003 estimate to $2.66 per share, as the company expects heavy new product spending. Maintain Neutral rating, but with our new $64 price target.

Lowe's Companies (LOW / NYSE)
Lehman Bros
The company should meet and could exceed our third quarter estimate by a penny. Commercial, installed and special-order sales continue to drive growth. Maintain Equal-weight rating.

McDonald's Corporation (MCD / NYSE)
Morgan Stanley Co.
Trimming estimates and our price target to $22 per share. We now expect the company to earn $1.40 in fiscal 2003 and $1.51 for next year, because of weaker sales trends. Maintain Equal-weight rating.

QUALCOMM (QCOM / Nasdaq)
Salomon Smith Barney
Chip shipments continue to grow with 20 mn in Sept Q and QCOM guided Dec Q to 25-27 mn units with 90% already in backlog. Mix of 1X chips to grow above 80% of total in Dec Q. Our new FY03 Rev and EPS ests are $3.5 bn and $1.15, respectively. Reiterate Outperform rating.

Safeway (SWY / NYSE)
Morgan Stanley Co.
Lowering our estimates and price targets to $19 per share, to match the company's new guidance. We now expect SWY to earn $2.77 this year and $2.55 in 2003, as the company has had a hard time keeping a lid on operating expenses. Maintain Equal-weight rating.

Safeway (SWY / NYSE)
Lehman Bros
Lowering our estimates to $2.74 in 2002 and $2.52 for next year, to match the company's new guidance. SWY is struggling to maintain its margins and remain competitive on price. Maintain Equal-weight rating.

Varian (VARI / Nasdaq)
Lehman Bros
Upping our price target to $33 per share, as we believe the company can deliver high tech products and deliver solid financial results. Maintain Equal-weight rating.

Williams Companies (WMB / NYSE)
NEWS
The energy company was subpoenaed by a U.S. attorney's office in California as part of a grand jury investigation into the manipulation of power prices.

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STRATEGY CALLS / MARKET CALLS
Morgan Stanley Co. (Auto Retail)
Downgrading our ratings on LAD, AN and UAG to Underweight, as we believe top-line and margin growth will be challenging in 2003. Our valuation analysis shows that there is another 10-15% downside potential.

Warburg Dillon Read (Wireless Services)
Given the outstanding performance of Nextel's stock over the past few months, we are switching our Fresh Money idea from Nextel to Sprint PCS. Sprint PCS has the most potential upside from current levels to our updated price targets, among the national providers. Furthermore, we believe that if Sprint PCS can execute on its strategy of focusing on the high-end prime user, it has the most upside to "Street" expectations, as well.

SALOMON SMITH BARNEY (Broadline Retail)
Looking ahead, retailers are up against a shorter holiday season of 26 days vs. 32 days last year. The Thanksgiving shift is expected to place pressure on November comps, but will be beneficial to December results. We have adjusted EPS estimates for COST, TGT, FD, JCP, KSS and MAY.

Prudential Securities (Technology)
Moving 3% of weight into information technology from consumer staples because the defensive sector has started to weaken.

Lehman Bros (Information Tech.)
Raising our recommended sector weighting to 16%, slightly ahead of the S&P 500 representation. We believe the latest interest rate cut will have a substantial effect on corporate spending.

Warburg Dillon Read (Telecom Equipment)
Recent improvement of Lucent's and Nortel's liquidity outlook as well as more comprehensive analysis of deferred tax assets has led us to raise our price targets on the two technology firms.

Credit Suisse First Boston (Railroads)
Trimming our estimates across the board, based primarily on lower light vehicle production. NSC, UNP and CNI are among the most affected companies. UNP and CP remain our top picks.

Morgan Stanley Co. (Managed Care)
We believe the selloff is overdone, and that the pricing cycle remains strong. Legislative environment is likely to remain benign. Maintain In-Line sector rating.
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