Wall Street traders have a habit of shooting first and asking questions later when it comes to bad news about stocks. Now it seems that some analysts are adopting a similar approach to rating stocks.

On Tuesday,

Merrill Lynch

(MER)

pharmaceutical analyst David Risinger first downgraded and then quickly upgraded shares of

Merck

(MRK) - Get Report

, after the company issued a press release debunking speculation that it would lower its earnings estimates for 2003.

Risinger's roller-coaster day began with Merck's surprise announcement that it would hold a conference call on Thursday to discuss its earnings guidance for next year. The analyst, who had a buy rating on the drug manufacturer's stock, interpreted this as a sign of potential bad news, because Merck officials already were planning to meet with analysts on Dec. 10.

In a hastily written research note, Risinger told Merrill customers and brokers to expect the worst, and advised them to start selling. The only reason for the conference call would be an attempt by Merck to "get bad news out ahead" of the analyst meeting, he said.

At a time when no analyst wants to be seen as some spineless stock tout, Risinger's cry to sell helped push down shares of Merck by as much as 7% in early trading. The heavy selling pushed Merck to issue a statement saying it stood by its earnings estimates for next year and wasn't planning to issue any kind of warning at the Thursday conference.

With the release of the statement, shares of Merck quickly began to rebound. Near the close of trading, the stock was down just 99 cents, or 1.7%, at just under $59 a share. So quicker than you can say Jack Grubman -- the notorious former

Citigroup

(C) - Get Report

telecom analyst -- Risinger found himself doing an about-face in the afternoon and upgrading the stock to a neutral rating.

In a second research note, issued just hours after the initial downgrade, Risinger said that following the company's comments, "the justification for the sell rating no longer exists." But in what might be a face-saving move, Risinger lifted the stock only to a neutral rating, saying he wanted to hear what Merck officials have to say on Thursday. Risinger, who began covering Merck a few weeks ago, couldn't be reached for a comment.