Friday morning, UBS issued an upgrade to Costco Wholesale (COST), elevating the warehouse retailer to buy from neutral.

The upgrade was made based on valuation, as UBS feels that recent weakness in the stock price offers a good entry point. In fact, UBS notes that Costco has "one of the world's best retail business models." The brokerage noted that removing calendar shifts and gas sales from Costco's comparable sales figures shows an "improving trend in all categories and in all U.S. regions."

Analyst Upgrades

• JPMorgan upgraded Norfolk Southern (NSC) to overweight from neutral, citing the company's leverage to coal and position relative to peers. The firm has a $68 price target for shares.
• Benchmark upgraded Royal Dutch Shell (RDS.A) to hold from sell based on a more favorable earnings outlook and reduced dividend risk.
• UBS upgraded Costco (COST) to buy from neutral based on valuation. The firm raised its price target to $63 from $62.
• Visa (V) was upgraded to gonviction buy from buy at Goldman.
• KLA-Tencor (KLAC) was upgraded to outperform from neutral at Credit Suisse.
• Texas Instruments (TXN) was upgraded to outperform from perform at Oppenheimer.

Walmart's (WMT) Sam's Club chain is launching a new initiative that is bound to steal a few customer away from rival Costco Wholesale (COST). It is teaming up with Superior Financial Group to offer loans of up to $25,000 to its small business members.

Now small business owners will be able to get their office supplies, their break room treats and their financing in one stop.

The credit markets have been tight since the financial crisis of 2008, and it has been especially difficult for small businesses to obtain financing -- which makes this a ripe market for Sam's Club to dive into. The program will focus on businesses owned by minorities, women and veterans.

Supermarket chain The Kroger Co. (KR), whose competitors include Costco Wholesale Corporation (COST) and Wal-Mart Stores, Inc. (WMT), was up over 3% at the time of this writing. At a price of $20.71, it was roughly four bucks under the 52-week high of $24.80. The volume was pretty active, indicating some conviction behind the trade. The catalyst was a Q1 earnings report. What should we make of the news?

Well, according to this item, the company competently beat the projections. Kroger made 58 cents per share; Wall Street was betting on 54 cents per share. But, investors won't enjoy the following information: last year at this time, the business earned 66 cents per share. Therefore, we have a decline in the bottom line to contend with.

Stocks were up early on a continued rally, then the market slid south into the red right around noon. A late-day recovery brought stocks back into positive territory, even though the real direction of the day was not easy to figure out until the very end. A mixed picture in the jobless data ahead of tomorrow's key unemployment data as well as a move downward earlier in the Euro all added to the confusion today.

Here were today's unofficial closing bell levels:

Dow 10,255.28 +5.74 (0.06%)
S&P 500 1,102.83 +4.45 (0.41%)
Nasdaq 2,303.03 +21.96 (0.96%)
Top Analyst Calls

Below are some highlights from this past week's earnings coverage on BloggingStocks. Click through to the original posts for more details.

• Ann Taylor Stores Corp. (ANN) shares rallied on heavy volume after it posted better-than-expected Q1 earnings.
• AutoZone Inc. (AZO) Q3 earnings easily beat consensus expectations and same-store sales rose sharply.
• Borders Group Inc. (BGP) posted a wider operating loss, decreasing gross margin, and a same-store sales decline.
• Campbell Soup Co. (CPB) posted strong Q3 results and offered guidance, boosting shares on a down-market day.
• Costco Wholesale Corp. (COST) posted better-than-expected Q3 results, due in part to a surge in membership sales.

Costco (COST) reported Thursday morning a 46% jump in third-quarter earnings. The warehouse retailer had solid sales during the third quarter, which helped push the company's profit to $306 million, or 68 cents per share. Membership revenue also increased 20%. The earnings topped the consensus estimate by two cents per share while revenue of $17.78 billion handily topped the estimates of $17.63 billion.

Technically, the stock finds itself at a bit of a crossroads. The shares have dropped enough in the past few weeks that they are now facing overhead resistance from their 50-week moving average.

U.S. stock market futures were sharply higher on Thursday, pointing to a rise of some 2% at the open, after China denied a report it was considering cutting its exposure to European debt and continue to hold onto the bonds for now. Meanwhile, investors also await weekly employment data and GDP figures.

A report in the Financial Times that Beijing was concerned about its exposure to European debt and was considering selling holdings helped push markets lower despite some upbeat economic news. But the denial by the People's Bank of China turned things around and stocks around the world rebounded with Asian markets closing higher Thursday and European markets up significantly.

Both Walmart (WMT) and BJ's Wholesale Club (BJ) reported strong quarterly results last week, suggesting that discount retailers are still doing well even as the economy seems to be coming around. This week, Costco (COST) and Big Lots (BIG) take their turns in the earnings spotlight, and analysts surveyed by Thomson Reuters expect a strong showing from them as well.

And we'll round out this preview of the coming week with a look at expectations for AutoZone (AZO), Canada's big banks, and Trina Solar (TSL).

Wal-Mart Stores, Inc. (WMT), perhaps the most famous retailer in the world, whose competitors include Costco Wholesale Corporation (COST), Sears Holdings (SHLD), and Target Corporation (TGT), is actually in the green as I compose this opening sentence during the afternoon trading session. Can you believe it? A stock actually in the green! After an earnings report, no less! It is currently higher by $1.62, or 3%, to $54.35. The traders are loving it, because volume is above average with a couple hours left to go before the bell tolls.

Wal-Mart hasn't been the most exciting stock over the last twelve months. The range hasn't been too wide, with a 52-week low of $47.35 and a 52-week high of $56.27. And the stock has sort of meandered around in something of a sideways pattern (you do get a dividend with the shares, though, so there is a total-return situation going on).

Retail is heating up. A look at the hottest retail ETFs shows that the sector is dramatically outperforming the market so far in 2010 -- up to four times over! That means if you were holding some of the elite retail components in these funds, you would be doing even better.

Take online retailer Overstock.com (OSTK), up over 65% since January 1 to today's opening bell! Any investor who has blacklisted the entire retail sector is missing out on big moneymakers like this company.

U.S. stock futures, which inched higher earlier Thursday morning, now turned lower even after several selloff sessions the past week due to concerns over the debt crisis in Greece and contagion probability across Europe. While Wall Street awaits some data on employment and retail among others, the European Central Bank has decided on interest rates.

Once again, U.S. stocks finished the session lower Wednesday, albeit with smaller declines. Civil unrest in Greece, fear of contagion and the euro sliding to 14-month lows were signs the crisis in Europe was deepening.

Costco Wholesale Corp. (COST) was a darling of investors during the economic downturn as the warehouse discounter offered cash-strapped consumers a deal and saw strong profits as a result. But with the worst of the global recession in the rear-view mirror, investors are wondering what's in store for Costco stock.

Now that economic conditions are improving, will shoppers keep ringing Costco's register? Chances are they will, if strong sales numbers recently are any indication. That means investors could still see some upside in COST shares.

If you're on the fence about Costco, here are three reasons you should hold your shares or buy in.

"Berkshire Hathaway's Warren Buffet is a disciple of the teachings of Benjamin Graham and David Dodd, who made their fortunes by buying businesses that were selling for less than the value of their working capital (current assets minus current liabilities," notes Vita Nelson.

The editor of The Moneypaper explains, "The pair developed a Net Current Asset Value (NCAV) model to determine if a company was worth its market price. Their formula subtracts all liabilities, including short-term debt and preferred stock, from a company's current asset balance"

Kroger Co. (KR), a supermarket business whose related stocks include Costco Wholesale (COST) and Wal-Mart (WMT), was trading down by almost 2% on Tuesday afternoon. Volume was quite strong. The fourth-quarter report served as the catalyst for today's action.

Total sales, without the assistance of fuel transactions, went up 2%. Identical supermarket revenues increased 1.2%. Not too invigorating, certainly, but what about the bottom line? Don't search for comfort there, because per-share profit dropped substantially to 39 cents per diluted share from 53 cents per diluted share in the comparable frame.