• A Russian court threw out a criminal case against a school principal accused of installing pirated Microsoft software in school computers.
• Microsoft scheduled an analyst meeting today at 10 a.m. EST in New York. While no shattering news is expected, speculation remains on what the software maker's Chief Executive Steve Ballmer and Chief Financial Officer Chris Liddell might be planning for the -- short, hour-long -- briefing.

Companies start to believe their own PR hype. Investors push a stock past logical limits. A company seems about to break down or break out. These are just a few things that can signal a stock with attitude. And... that attitude can be good or bad for the stock price, since attitude always catches up with reality. At least on Wall Street, that is.

Kohl's Corp. (NYSE:KSS) was up $1.17 (1.62%) yesterday to close at $73.18 on about half the stock's average daily volume. Investors may have been encouraged by a report that clothing retailers and other specialty stores are expected to show strong January same-store sales, as better weather conditions and gift card redemption spur positive results at cash registers. The technicals for KSS have been improving lately and the stock has a cautious S&P 3 STAR (out of 5) hold rating with a 12-month price target of $78. Out of the 18 other analysts who cover the stock, six give it a strong buy, two a moderate buy, nine a hold and one guy still waiting in the check-out line gives it a strong sell.

Along with generally strong consumer spending Kohl's has been on a steep uptrend since the stock hit a low of $43.90 on February 2, 2006 and worked its way up 72% to a high of $75.54 on November 11, 2006. The stock is now a little more than $2 below its 52-week high. Expect Kohl's to benefit from continued strong consumer spending on apparel in a less-than-weak economy.

Who else but supreme optimists would buy stock in a drug maker facing more than 27,000 lawsuits regarding Vioxx, not including the Pennsylvania woman who recently dropped hers? Their faith that Merck will beat these cases is evident in the stock price.

Shares of Merck have jumped more than 39% over the past year, outperforming Pfizer Inc. (NYSE:PFE) Novartis AG (NYSE:NVS) and Schering-Plough Corp. (NYSE:SGP). Granted, beating Pfizer isn't that much of a victory, but still, that's a decent move.

Wall Street, which is awaiting Merck's fourth quarter results Jan. 30, expects the stock to climb further. The median target for Wall Street analysts is $48.50, according to Thomson Financial. Opinion, though, remains divided. Eleven analysts consider the shares either a strong buy or buy, 10 rate it a hold, and 3 a sell.

Merck has already said earnings this year are going to be lackluster and Wall Street is taking the company at its word. Analysts are forecasting earnings of 50 cents on sales of $5.38 billion, according to Thomson Financial. A year earlier, the company had a profit of 64 cents and revenue of $5.77 billion.

As Douglas McIntyre pointed out, Merck needs to convince investors that it's not Pfizer in the wake of that company's failed anti-cholesterol drugs. The Whitehouse, New Jersey-based company said last month that it will seek approvals for three important drugs this year and would have four more drugs in late-stage trials by mid-2007.

Also check out some other earnings reports that we're following, and let us know your thoughts on earnings expectations.

MOST NOTEWORTHY:

• JP Morgan initiated Federated Dept Stores (NYSE: FD) with a Neutral rating. They believe Federated's merger remains a struggle while the company's valuation is stretched.
• JP Morgan see Nordstrom Inc (NYSE: JWN) as one of the strongest retail models in their universe, but consider the stock's valuation to be rich. The firm initiated Nordstrom with a Neutral rating.
  

• IPG Photonics (NASDAQ: IPGP), a designer and manufacturer of optical fiber-based lasers and fiber amplifiers, was initiated at five research firms this morning: Needham, Jefferies and Merrill Lynch with a Buy rating, Lehman Brothers with an Equal Weight rating and Thomas Weisel with an Overweight.

• Guidance Software (NASDAQ: GUID) was initiated at three firms: With a Buy rating at AG Edwards, an Overweight rating at Morgan Stanley and an Outperform rating at Wachovia.

Is America one big boring cliche after another? To many foreigners it is, since most of our shopping -- a very big reason for tourism anywhere -- is done at cookie-cutter chain stores. Whether it be home furnishings, consumer electronics, food or baby clothes, there is a chain store (and many different ones at that) dedicated to feeding the commerce need we have for every possible segment of living. Capitalism at its best, you might say. Or, its worst, if you're into the "experience" of shopping rather than the "task" of shopping.

For the most part, done are the days of the "mom and pop" store. The chains are everywhere, ready to sell, serve and provide anything they possibly can while collecting as much information about you as they can. Now, I'm not necessarily against chain stores; as the biggest force in the world's largest economy (at least two-thirds of it) runs from the same consumers who keep these chain stores humming night and day.

Chains like the following list are present in almost every large American city (get ready...deep breath) Bed Bath & Beyond; Linens-n-Things; Barnes & Noble and Borders; PetSmart and Petco; Circuit City and Best Buy; Lowe's and Home Depot; CVS and Walgreens; Wal-Mart, Target and Costco; Dollar General, Family Dollar and Dollar Tree. Need more? How about the Apple Store and Pottery Barn, the Gap and Ann Taylor, Banana Republic and DSW, Starbucks and McDonald's. Now that's a lot of chain stores. What would we do without all these chain stores? Probably we'd all pay higher prices while actually enjoying the shopping experience again. We might even form social attachments to our local merchants again. But, the American consumers' motto continues to be "price, price, and -- well -- price."

That's why we have chain stores.

MasterCard Advisors says that holiday spending is growing at about half of last year's 8% increase. The news is not exactly a bright spot for companies like Wal-Mart Stores, Inc. (NYSE:WMT), Target Corporation (NYSE:TGT), or Federated. They need a sharp uptick to drive earnings. Wal-Mart especially needs a jolt.

Online sales growth is also slowing. The rate of increase has been over 20% in years past but Reuters quotes a SpendingPulse executive as saying "this year they're in the teens." This would seem to contradict data from ComScore that shows online spending up about 25% for the holidays.

If the MasterCard data is right, a lot of retailers are going to have rough fourth quarters.

Douglas A. McIntyre is a partner at 24/7 Wall St.

MOST NOTEWORTHY: Nuvelo (NUVO) and the Asian Semiconductor sector were today's most notable downgrades:

• Nuvelo (NASDAQ:NUVO) was downgraded to Neutral from Buy at Oppenheimer and Sector Performer from Sector Outperformer at CIBC World Markets, both companies citing negative clinical data;
• additionally, Merrill Lynch downgraded the Semiconductor sector to Market Weight from Overweight,
  • specifically downgrading Chartered Semiconductor (NASDAQ:CHRT), Siliconware Precision Inds Ltd (NASDAQ:SPIL) and STATS ChipPAC (NASDAQ:STTS) to Neutral from Buy
  • and United Microelectronic (NYSE:UMC) to Sell from Neutral, citing valuation.

OTHER DOWNGRADES:

• JP Morgan downgraded Wendy's (NYSE:WEN) to Underweight from Neutral as they believe shares are already pricing in years of sales and earnings growth at a time when competition is intensifying; they are also concerned over Wendy's new breakfast roll-out.
• Jefferies downgraded Autodesk (NASDAQ:ADSK) to Hold from Buy citing valuation.
• Bank of America said there are risks to Federated Dept. (NYSE:FD) comps at MAY stores and downgraded the company to Neutral from Buy, with a $43 target.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Federated Department Stores (FD), Wal-Mart (WMT) and Cheesecake Factory (CAKE) topped today's downgrade list.

• Citigroup downgraded Federate Department Stores, Inc. (NYSE:FD) citing weaker than expected comps, market share losses at former May stores and valuation for their rationale.
• Wal-Mart Stores Inc. (NYSE:WMT) was taken off Goldman Sachs' America's Conviction Buy List; The firm sees little momentum heading into the holiday season.
• Robinson Humphreys downgraded Cheesecake Factory Inc. (NASDAQ:CAKE) to Reduce from Neutral following the company's reduced outlook.

OTHER DOWNGRADES:

• Prudential downgraded Hershey Co. (NYSE:HSY) to Underweight from Neutral as they believe Q3 revenue guidance may not be a one-time event; They are concerned over Hershey's higher costs and marketing mix, and note that the company will not benefit from the weaker dollar like some peers.
• Jefferies downgraded Digital Insight Corp. (NASDAQ:DGIN) to Hold from Buy on valuation; they felt Intuit Inc.'s (NASDAQ:INTU) premium offer for Digital Insight was justified.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Analysis provided by Eric Buscemi of Theflyonthewall.com:

Earlier in the week we blogged about Wal-Mart's Same-Store Sales miss, saying this was not enough information to signal the awful holiday shopping season the market predicted from the indicator. With more information now available, we thought we would review:

• Wal-Mart Stores Inc. (NYSE:WMT) confirmed its preliminary SSS estimate of -0.1%, which at least did not drop further. Competitors Target Corp. (NYSE:TGT) and Costco Wholsesale Corp. (NASDAQ:COST) also announced their SSS numbers, with Target outperforming slightly [+5.9% vs. +5.7%] and Costco underperforming slightly [+5% vs. +5.7%]
• High-end retail looked good, with both Federated Department Stores Inc. (NYSE:FD) [+8.4% vs. +4.8%] and Saks Inc. (NYSE:SKS) [+7.2% vs. +6.8%] outperforming
• Clothing retailers were mixed, with Guess Inc. (NYSE:GES) [+12.1% vs. +5.6%], Pacific Sunwear of California Inc. (NASDAQ:PSUN) [-3.8% vs. -4.6%] and Hot Topic Inc. (NASDAQ:HOTT) [-4.3% vs. -6.8%] beating consensus estimates, while Abercrombie & Fitch Co. (NYSE:ANF) [-3% vs. +3%], Bebe Stores Inc. (NASDAQ:BEBE) [+5.8% vs. +7.9%] and perennial underperformer Gap Inc. (NYSE:GPS) [-8% vs. -5.4%] fell short of their estimates
• Speaking of perennial underperformers, Pier 1 Imports Inc. (NYSE:PIR) [-15.3% vs. -13.6%] and Sharper Image Corp. (NASDAQ:SHRP) [-27% vs. -18%] continued embarrassing their investors.

This adds up to a mixed bag for retailers, with the sector as a whole seeing a good deal of weakness today. This Fly maintains that it is still too early to predict doom and gloom for the whole season, however. The true telling sign for the holiday shopping season will be in consumer electronics, as CIBC World Markets channel checks predict that consumer electronics "won the day" on Black Friday.

Main market news here.

Retailers in focus today will undoubtedly include Wal-Mart Stores, Inc. (NYSE:WMT), Best Buy (NYSE:BBY) and Federated Department Store (NYSE:FD) as they opened their stores earlier. Some other could include Circuit City Stores (NYSE:CC) and Target Corp. (NYSE:TGT).

Meanwhile, according to The New York Times, Wal-Mart also received the permission of Mexico's finance ministry to open a bank in the country. This could present a large growth market since as many as 80% of Mexicans don't have bank accounts. Units of Banco Bilbao Vizcaya Arg ADS (NYSE:BBV), Banco Santander Central Hispano (NYSE:STD), HSBC Holdings ADS (NYSE:HBC) and Citigroup, Inc. (NYSE:C) control more than 70% of Mexico's banking

And as today is Black Friday, many await Cyber Monday, the Monday that has been dubbed so as it is believed to be the equivalent of Black Friday for online retailers such as Amazon.com, Inc. (NASDAQ:AMZN) and eBay, Inc. (NASDAQ:EBAY). Well, apparently, this isn't the case and data put the busiest online shopping day roughly two weeks before Christmas with Dec. 5 the busiest last year. Regardless, more and more shoppers choose to avoid the frenzy of malls and stores and shop online from the comfort of their own home.

In the new, but already epic battle between Apple Computer, Inc.'s (NASDAQ:AAPL) firmly set iPod and the new kid in the block, Microsoft Corp.'s (NASDAQ:MSFT) Zune, here is another article that doesn't think Zune stands a chance. Why? Other than the obvious (and lacking) tech related features, the recent deal Microsoft has struck with the music industry will make the player unwanted by most music fans as the deal not only limits downloaded songs to a specific player, transmitted songs from one device to another expire after three plays or days.

General Motors Corp. (NYSE:GM) will no doubt continue to be in focus today as well after declining more than 4.6% on Wednesday due to several reasons, not in the least was Kerkorian sale of 14 million GM shares, reducing his stake in the company. GM shares are down 0.6% at 8:00 a.m. in pre-market.

As opposed to GM, Dell, Inc. (NASDAQ:DELL) was a winner on Wednesday closing up more than 9% after reporting preliminary financial results late Tuesday. Dell shares were down 0.2% at 8:12 a.m. in pre-market.

In the movie biz, it seems Hollywood isn't satisfied with its share and is now eying India's prolific film industry, dubbed Bollywood and which was valued at about $1.75 billion in 2006 and is forecast to nearly double to $3.4 billion by 2010. Sony Corp.'s (NYSE:SNE) Sony Pictures last year signed a local co-production deal for a Hindi film, and Walt Disney Co. (NYSE:DIS) bought UTV Software Ltd.'s children's Hindi-language entertainment channel for $30.5 million in July. Meanwhile in China, the studios run into problems. Time Warner, Inc. (NYSE:TWX) recently pulled out of its cinema joint venture in China and News Corp. (NYSE:NWS) in June said it would sell a majority of its stake in a Chinese broadcaster. Might these two be heading to India?

According to The Wall Street Journal, Jack Welch , former General Electric Co.(NYSE:GE) CEO is leading a group that may make a formal bid for the Boston Globe early next year. The group's first offer didn't agree with Boston Globe's parent New York Times Co. (NYSE:NYT). The decision could also be affected by the current auction of Tribune Co. (NYSE:TRB) outcome.

Without giving an exact date, the judge presiding over Google Inc. (NASDAQ:GOOG) and Belgian newspapers case said she would deliver her verdict after the Christmas break, that is, early next year. The case would settle the dispute on whether Google was wrong to display content from the newspapers' Web sites without paying them or asking their permission

San Miguel Corp., the Philippines' largest food and beverage conglomerate, said it was still negotiating the sale of its soft drinks bottling joint venture with Coca-Cola Co. According to the Philippine Daily Inquirer the company has agreed to sell its 65% stake in the venture to Coca-Cola (NYSE:KO) for an estimated $700 million.

"Mergers often lead to creating shareholder value," Karmazin, Sirius Satellite Radio (NASDAQ:SIRI) CEO said in an interview. Could the XM Satellite Radio Holdings (NYSE:XMSR) Sirius merger be closer than ever? Here's an interview with Mel Karmazin.

When my colleagues and I said yesterday that gridlock would be good for Wall St., we didn't mean the kind that would require a legal battle and most likely a recount.

Americans, it seems, by and large have spoken, saying they want change. Democrats have gained a comfortable majority in the House of Representatives for the first time since 1994. As for the Senate, results are now locked at 49 seats each with Montana and Virginia still undecided.

Futures are negative in early morning trade, pointing to a lower start for stocks, probably due to this indecision in the Senate and the possibility the Dems will take both houses. Wall St. likes to know where it stands and doesn't like uncertainties. International stock markets were down with the Nikkei 225 finishing 1.1% lower.

Commenting on the possibility that the Democrats could take both houses, many analysts don't expect a pullback in the stock market, and if there were one, it would be short-term, many say. Despite the market having issues with some suggested Democratic policies such as capital gains tax or minimum wage increase, the issue of the economy was the third most important issue with 50% believing the U.S. economy isn't doing well. Democrats have captured many votes from those.

The question now is how the relationship between the president and the House would be. How would the election outcome affect the war in Iraq, for example, or what measures can the Democrats take before the president uses his veto pen. In case of a tie in the Senate, it is up to vice president Cheney to cast the deciding vote, which in this case would swing the vote the Republican way.

Economic data reported today is limited. At 10:30 a.m. crude inventories will be reported. Usually this does not have a great impact unless inventories surprise one way or the other. Oil prices could then be affected. Oil prices have etched up this morning but are still below $60 a barrel.

Reporting today are: Federated Department Stores (NYSE:FD), Cablevision Systems (NYSE:CVC), Cisco Systems (NASDAQ:CSCO), PG&E Corp. (NYSE:PCG), Sirius Satellite Radio, Inc. (NASDAQ:SIRI) and News Corp. (NYSE:NWS, NWS.A).

Two companies are expected to fall: True Religion Apparel (NASDAQ:TRLG) plunged 20% in after-hours trading yesterday after reporting disappointing results and lowering outlook for the year, UTStarcom (NASDAQ:UTSI) fell more than 5% in after-hour trading after announcing it would delay the release of its third-quarter earnings.