Shares of Public Storage Inc. surged 20 percent on Friday after an analyst upgraded the company’s stock, arguing the self-storage company’s secure financial position can be seen as a safe harbor for investors in the unsettled market climate.

Wachovia Capital Markets LLC analyst Jeffrey Donnelly upgraded shares to “outperform” from “underperform,” noting that the company had a strong credit position with $3.5 billion preferred equity and debt of less than $700 million. That debt could be paid with retained cash flow if necessary, he noted.

Donnelly did caution that a likely gradual slowdown in storage demand through 2010 could reduce revenues by limiting price increases. That could be offset by greater use of storage facilities by customers hit by job losses or home foreclosures needing storage space.

Public Storage shares closed up $14.30 to $84.80 on the New York Stock Exchange.

Los Angeles Business Journal’s index of the 200 largest local public companies close down for the week ended Oct. following eight consecutive days of overall market downturns. The local index closed down 17 percent to 103.43 on Friday compared to a week ago, with losers outpacing gainers 179 to 16.