Each weekday, TheStreet.com Ratings updates its ratings on the stocks it covers. The proprietary ratings model projects a stock's total return potential over a 12-month period, including both price appreciation and dividends. Buy, hold or sell ratings designate how the Ratings group expects these stocks to perform against a general benchmark of the equities market and interest rates.

While the ratings model is quantitative, it uses both subjective and objective elements. For instance, subjective elements include expected equities market returns, future interest rates, implied industry outlook and company earnings forecasts. Objective elements include volatility of past operating revenue, financial strength and company cash flows.

XL Capital

(XL) - Get Report

sells insurance and reinsurance coverage to industrial, commercial and professional service firms. It has been downgraded to a hold from a buy. The company's debt-to-equity ratio of 0.25 is very low and currently below that of the industry average, implying that there has been very successful management of debt levels. XL's return on equity increased to 16.56% in the third quarter compared with 4.51% in the same period last year.

However, the company's third-quarter earnings fell to $1.82 per share from $2.32 a share in the same period last year, and net income dropped 12.7% to $371.64 million from $425.87 million. Its stock price has fallen 30.52% in the last 12 months. XL had been rated a buy since November 2006.

UST Inc.

(UST) - Get Report

manufactures and markets smokeless tobacco and premium wines. It has been downgraded to a hold from a buy.

The company's third-quarter revenue increased 4.4% compared with the same period last year, aided by a combination of strong volume growth in both its smokeless tobacco and wine segments, as well as improved international results.

The American market is growing consistently as smokers switch to smokeless tobacco, and UST recently purchased Stag's Leap Wine Cellars and its signature Napa Valley vineyards to bolster its wine division. UST has increased its dividend to shareholders every year since 1965, and at its current price levels, the company's dividend rate translates into an attractive yield. It recently increased its share repurchase program and plans to make share repurchases worth $600 million in fiscal 2007.

The threat of new competition from large tobacco companies like

Reynolds American

(RAI)

, who have entered the smokeless tobacco market, is the principal risk faced by the company. Additionally, TheStreet.com Ratings is concerned about consumers' downgrade to cheaper brands and continued margin pressure.

Discovery Holding Company

(DISCA) - Get Report

offers creative and network services to the media and entertainment industries through its wholly owned subsidiary, Ascent Media Group. It has been downgraded to a hold from a buy.

Third-quarter net income swung to a profit of $7.51 million compared with a loss of $76.63 million in the same period last year, and earnings per share swung to a gain of three cents from a loss of 27 cents in the same timeframe. Discovery has reported somewhat volatile earnings recently, but TheStreet.com Ratings feels it is poised for EPS growth in the coming year.

However, the company displays poor profit margins and weak operating cash flow. It had been rated a buy since July 2007.

Altera

(ALTR) - Get Report

designs, manufactures and markets programmable logic devices, structured application-specific integrated circuits, predefined design building blocks and associated development tools. It has been downgraded to a hold from a buy.

The company is carrying no debt and maintains a quick ratio of 2.64, demonstrating the ability to cover short-term cash needs. Return on equity increased to 25.10% for the third quarter compared with 18.87% a year earlier, while net operating cash flow increased 17.34% to $128.45 million over the same period.

However, the company's third-quarter income fell 21.1% to $68.96 million from $87.42 million and earnings per share fell to 20 cents from 24 cents. Altera's stock price has fallen by 11.35% in the last 12 months, and the fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time. It had been rated a buy since December 2006.

Inverness Medical Innovations

( IMA) develops, manufactures and markets in vitro diagnostic products. It has been upgraded to a buy from a hold. The company's third-quarter revenue rose by 64% compared with the same period last year, outpacing the industry average of 2.5%. Its stock price has jumped 45.11% in the last 12 months, and while almost any stock can fall in a broad market decline, the stock should continue to move higher.

However, third-quarter earnings fell to a loss of $3.74 per share compared with a loss of 27 cents a share the year before. The company has reported somewhat volatile earnings recently, but TheStreet.com Ratings believes it is poised for EPS growth in the coming year. It had been rated a hold since Oct. 18, prior to which it had been rated a sell since August 2007.

Additional ratings changes are listed below.