Markets were up slightly this week, as positive economic reports were tempered by growing uncertainty in Ukraine. The S&P 500 set record highs and stocks were still moving up on Friday morning after positive jobs numbers bolstered investor confidence. The Bureau of Labor Statistics announced that nonfarm payrolls rose by 175,000 in February, which was above expectations of 149,000. As well, initial jobless claims came in at 323,000, lower than the 336,000 that was expected. Despite this positive job news, the unemployment rate was up slightly to 6.7% from 6.6%. In M&A news, Safeway announced that it was being bought by Cerberus Capital Management in a deal worth $9.4 billion, and Comcast announced that it had purchased advertising startup Freewheel for $360 million. Turning to bonds, 10-Year Treasury yields rose steadily throughout the week, starting off on Monday at 2.6 and ending Thursday at 2.74. Below, we look at Moody's many municipal bond upgrades and downgrades from the past week.

Upgrades

• Newburgh, NY: Moody's upgraded this city to Baa3 from Ba1. The upgrade to Baa3 reflects the city's improved financial position, active state oversight, high debt burden, declining tax base and weak socioeconomic indices. The positive outlook reflects our expectation that the city will continue to experience operating surpluses given its commitment to growing reserve levels.
• Archuleta School District No. 50 JT, CO: Moody's upgraded this school district to Aa3 from A1. The upgrade reflects the district's exceptionally strong financial position, and positive multi-year financial trends. The district's financial position is characterized by structurally balanced fiscal operations and very high General Fund reserves and liquidity. The rating also incorporates the district's moderately sized tax base and somewhat limited economy that is based largely on tourism.
• Lebanon, VA: Moody's upgraded this town to A2 from A3. The upgrade to A2 reflects the town's strong financial position with reserve levels that have grown by 30.4% over the last five years and are expected to increase again in fiscal 2013 and 2014. The rating also reflects the town's limited tax base with below average wealth levels, significant taxpayer concentration, poorly funded pension position and a low debt burden.
• Cook County, MN: Moody's upgraded this county to Aa3 from A1. The Aa3 rating is based on the county's moderately sized tax base in northern Minnesota, stable financial operations with strong reserves, and a manageable debt burden with a lack of future borrowing needs.
• Birmingham-Southern College, AL: Moody's upgraded this college to B3 from Caa1. The upgrade to B3 reflects ongoing traction in Birmingham-Southern College's recovery plan. Operating performance in FY2013 was strong with a 17.7% operating cash flow margin, in part supported by $8.7 million in unrestricted gifts. This enabled the college to begin to rebuild some flexible reserves, although liquidity remains low. During fiscal 2013 the college was also taken off warning by SACS and extended its largest credit agreement with Regions Bank.
• South Farmingdale Fire District, NY: Moody's upgraded this fire district to Aa3 from A1. The upgrade to Aa3 reflects the district's sizable tax base with high wealth levels, minimal debt burden, and stable financial position.
• Village of Kildeer, IL: Moody's upgraded this village to Aa2 from Aa3. This action concludes a review for possible upgrade that Moody's had initiated on January 15, 2014 in conjunction with our new local government general obligation methodology. The village's debt certificates are secured by its GOLT pledge to make timely payments of debt service from any and all lawfully available funds of the village.
• Massachusetts Development Finance Agency: Moody's upgraded this agency to Aa3 from A2 the long-term letter of credit backed rating of the Massachusetts Development Finance Agency Variable Rate Demand Revenue Bonds (New Bedford Waste Services, LLC Issue), Series 2001. The ratings are based upon the CLOC provided by the U.S. Bank and an LOC provided by Webster Bank.
• Tazewell County School District 51, IL: Moody's upgraded this school district to Aa3 from A1. The Aa3 rating incorporates the district's modest full valuation located just east of Peoria, IL (Aa2 Stable), healthy financial profile characterized by ample reserves, modest dependency on state subsidized revenues, average debt profile, and the potential for pension cost shifts from the state of Illinois (A3 Negative).

Downgrades

• UMass Memorial Health Care: Moody's downgraded this organization to Ba1 with a negative outlook. The Ba1 rating and negative outlook reflect the sharp decline in operating performance in FY 2013 and the expectation of an operating deficit and extremely thin operating cash flow in FY 2014, as well as the longer term fundamental challenges facing the system and impeding a return to positive performance.
• Yeshiva University, NY: Moody's downgraded this university to B3 from B1. The downgrade to B3 from B1 reflects the continued weakening of the university's financial viability given the rapid deterioration of unrestricted liquidity from severe and ongoing operating deficits. The rating action also incorporates the subordinate position of bondholders to other debt and the potential for deeper subordination as access to external credit facilities may require additional collateral.
• Oshkosh, WI: Moody's downgraded this city to Aa3 from Aa2. The downgrade to the Aa3 general obligation rating reflects the city's sizeable tax base with a high concentration of manufacturing; satisfactory General Fund operations, and an elevated debt burden. The rating also incorporates the institutional presence of a University of Wisconsin campus, the city's relatively narrow General Fund cash position and weak position of other funds as well as its modest pension burden.
• Miller, SD: Moody's downgraded this city to Baa1 from A3. The downgrade to Baa1 reflects the systems narrow debt service coverage, a small and challenged system that has experienced a recent decline in customer base, and sufficient legal provisions. The rating also takes into account the system's healthy net working capital and liquidity level.
• Norway Vulcan Area School District, MI: Moody's downgraded this school district to A2 from A1. The downgrade to A2 from A1 reflects the district's declining General Fund reserve levels and trend of operational imbalance. The A2 rating also incorporates the district's modest tax base in the upper peninsula of the state of Michigan (Aa2/positive outlook), weak demographic profile, alternate liquidity present in the Capital Projects Fund, declining enrollment trends, and an average debt burden.
• Borough of Watchung, NY: Moody's downgraded this borough to Aa2 from Aa1. The downgrade to Aa2 reflects the borough's declining and structurally imbalanced financial position. The Aa2 rating also factors the borough's moderately-sized tax base located in Somerset County (G.O. rated Aaa) with strong wealth indices, manageable debt burden and above average pension liability.
• Chicago, IL: Moody's downgraded Chicago to Baa1 from A3. The Baa1 rating on Chicago's GO debt reflects the city's massive and growing unfunded pension liabilities, which threaten the city's fiscal solvency absent major revenue and other budgetary adjustments adopted in the near term and sustained for years to come.
• Davis Health System, WV: Moody's downgraded this health system to Caa3 from B2. The rating downgrade to Caa3 reflects the severity of DHS' financial challenges with high leverage relative to a very weak liquidity position, a significant variance from expected operating performance in FY 2013, persistently weak margins and thin operating cash flow available for debt service payments, raising the risk of payment default over the near term.
• Arnot Ogden Medical Center, NY: Moody's downgraded this medical center to Baa3 from Baa1. The magnitude of the downgrade to Baa3 is due to Arnot's material decline in financial performance in fiscal year (FY) 2013 to barely breakeven operating cash flow, driven by severe volume losses that are not likely to return in the near-term and impairing the hospital's fundamental market position.
• Hempstead, TX: Moody's downgraded this city to A2 from A1. The downgrade to A2 reflects the city's small tax base and low socioeconomic profile relative to A1 rated cities. The A2 rating also reflects a somewhat narrow reserve position with heavy reliance on the utility system to balance fiscal operations and a low direct debt burden with all debt supported by the utility system.
• Miss Porter's School, CT: Moody's downgraded this school to A2 from A1. The downgrade reflects Miss Porter's inability to maintain financial resources and liquidity growth in line with peers, combined with relatively weak operating performance for the rating given the school's small size.
• Montgomery County Community College, PA: Moody's downgraded this college to A1 from Aa3. The downgrade to A1 is attributable to MCCC's weakened operating performance in FY 2013 driven by a substantial decline in county operating appropriations and reflects our expectations that future operating deficits, as projected by the college, will cause some erosion in financial resources.
• Tabor Academy, MA: Moody's downgraded this academy's bonds to A3 and VMIG 2 from Aaa and VMIG 1. The ratings are based on the credit quality of the Bank and the structure and legal protections of the transaction, which provide for timely payment of debt service and purchase price to bondholders.
• Dade County, GA: Moody's downgraded this county to A2 from A1. The downgrade to A2 reflects the multiple years of deficits resulting in a negative unassigned General Fund balance for fiscal year 2013 and declines in sales tax revenues.
• Columbia Local School District, OH: Moody's downgraded this school district to A2 from A1. The downgrade to A2 reflects a material weakening of liquidity and reserve levels as a result of sizeable operating deficits generated by the district from fiscal 2008 through fiscal 2012. The A2 rating also reflects the district's strong socioeconomic profile, below average debt burden, limited, though stable, tax base, and long term risks posed by exposure to underfund cost-sharing pension plans.
• Commerce City School District, GA: Moody's downgraded this school district to Baa1 from A1. The downgrade to Baa1 from A1 reflects the district's reduced financial position, including the depletion of reserves, which will continue to experience fiscal pressure over the near term. The rating also incorporates the limited tax base with below average socioeconomic indices and moderate debt and pension liabilities.