Trade deficits, record government budget deficits... Humbug! Today was a day where bad news did not matter in the broader sense. Overseas markets were up, but the U.S. was where the action was.

Here were the unofficial closing bell levels:

Dow 10,896.91 +148.65 (1.38%)
S&P 500 1,171.67 +15.88 (1.37%)
Nasdaq 2,425.02 +49.71 (2.09%)

Top Analyst Calls

U.S. stock futures advanced Wednesday after Spain promised to make bigger cuts as it unveiled austerity measures. This helped to further ease concern over Europe that didn't seem to fully disappear after the agreed upon $1 trillion bailout package. Investors also await some economic data due out this morning.

European stock markets and the euro were higher Wednesday after Spain unveiled spending cuts that aim to cut its budget deficit by a further 1.5 percentage point to 6% of the country's gross domestic product in 2012. While Britain's financial markets gave a lukewarm response to the the country's new coalition government, German markets rose decidedly higher after the country released better-than-expected economic growth.

U.S. stock futures, except for the Nasdaq, slightly fell Wednesday morning. While tech stocks got a boost from Apple's strong showing late Tuesday, investors remained more cautious as a wave of earnings from bellwether companies, as well as two companies were reported this morning.

After Goldman Sachs (GS) reported strong earnings on Tuesday, helping markets recover after the hit they took when the SEC file civil fraud charges against the bank, Apple (AAPL) posted late Tuesday a 90% jump in quarterly profit on 49% revenue growth. The unstoppable company reported hot sales across all of its major product lines. Nasdaq composite futures rose as a result Wednesday morning.

SPDR Gold Trust (GLD) recently down 79 cents to $110.43 in pre-open trading. Gold is recently down 0.81% to $1127.70. GLD overall option implied volatility of 20 is near its 26-week average of 22, according to Track Data, suggesting non-directional price movement.

Morgan Stanley (MS) closed at $29.16. The SEC charged Goldman Sachs (GS) with fraud relating to CDOs. MS is scheduled to report Q1 EPS on April 21. Overall option implied volatility is at 36, versus its 26-week average of 35, according to Track Data.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Earnings season is in full swing, and this week will bring quarterly results from Amazon.com (AMZN), DeVry (DV), Freeport McMoRan (FCX), Hershey (HSY), Kimberley-Clark (KMB), Starbucks (SBUX), Union Pacific (UNP) and United Technologies (UTX), all of which, according to analysts surveyed by Thomson Reuters, are expected to post double-digit earnings growth from the same period of last year (when most stocks were at their recessionary lows).

After strong showings last week by Google (GOOG), Intel (INTC) and JPMorgan Chase (JPM), the earnings spotlight again will be on the tech and financial sectors. So, let's take a closer look at what's expected from impending results from Apple (AAPL), International Business Machines (IBM) and Western Digital (WDC), as well as Goldman Sachs (GS), American Express (AXP) and Morgan Stanley (MS).

Thanks to a trillion dollars in credit losses write-downs on mortgage-related securities in 2007 and 2008, financial companies around the world had a lot of capital to recapture. So, in the first half of 2009, they issued stock. More than half the new shares to come out worldwide in those six months were issued by banks and brokers. All this stock, of course, translated to fees for investment banks. In a strange way, consequently, the financial industry healed itself.

According to Bloomberg, investment banking fees surged 13% in 2009, from $53.1 billion to $59.8 billion. This is still far short of the $86.9 billion record set in 2007, but it's at least a step in the right direction. Even with the surge of bank and broker shares issued in the first two quarters last year, total activity was still lower than in 2008.

Banks are the kink between the financial markets and the Main Street economy. They are also the lubricant -- when they are lending -- of a growing economy.

Using time-honored but now discarded accounting standards, U.S. banks, as a group, are insolvent. They are hoarding cash because deep in the recesses of little offices, they know they will be exposed as insolvent if they have to dump toxic assets on the market. They are also looking at reduced activity due to the economy and new taxes and regulations, and therefore lower profits. And when the Fed raises interest rates, their spreads will contract, also hitting profits.

I love my country: the chaos, the hurly-burly of democracy, the hard work of quiet people and the great, big heart as shown by our private donations to Haiti at a time of near 20% unemployment and underemployment. We forgive wayward politicians and athletes, let our children make more decisions than virtually any people on Earth and we stand for something -- a true city on a hill. But right now, that city is in political chaos ... and pretty broke.

Although, I don't like to say it, it is time to short the United States.

Banks have seen a hectic couple of days' of trading, thanks to a bevy of news. I thought it may be good to take a look at some earnings results from a few of the banks, and what it could mean for the economy going forward.

First, let's look at the earnings:

• JPMorgan Chase (JPM): earnings of 74 cents per share; expectations for 60 cents per share
• Citigroup (C): a loss of six cents per share; expectations for a loss of 33 cents per share
• Goldman Sachs (GS): earnings of $8.20 per share; expectations for earnings of $5.20

U.S. stock futures were mixed Friday morning as investors mulled results from General Electric and others, and focused on the effects President Obama's plan to overhaul Wall Street would have on banks.

On Thursday, Wall Street suffered one of the worst day in month after the Obama administration announced a proposal to increase regulation on the financial industry. Despite several strong earnings, concerns over China's efforts to curb lending, a surprise increase in jobless claims and a drop in manufacturing amounted to the Dow industrials sinking 213 points, or 2%. The broader S&P 500 lost 1.9% and the Nasdaq composite tumbled 1.1%.

One of the true icons of finance, Goldman Sachs Group (GS), issued its Q4 report this morning. The stock has been weak off the numbers; at the time of this writing, shares were down well over 5%, and volume was very active. Looking through the press release, I didn't come away as bearish as the market. Then again, the session as a whole was rather choppy, so perhaps overall sentiment was exerting an influence. Still, a 5% sell-off is notable.

Let's look at some highlights. For the fourth quarter, Goldman, whose colleagues include JPMorgan Chase (JPM) and Morgan Stanley (MS), made $8.20 per share. Last year at this time, the company reported a loss of $4.97 per share. Besides improving year-over-year, per-share profit increased over 50% on a sequential basis as well. According to Earnings.com, $5.20 was the number to beat.

Analyst Upgrades

• FBR Capital upgraded Wells Fargo (WFC) to market perform from underperform and raised its target on shares to $26 from $21 following the company's better-than-expected quarter.
• Deutsche Bank upgraded Starbucks (SBUX) to buy from hold following the company's better-than-expected Q1 results. The firm raised its target price on shares to $30 from $19.
• UBS upgraded Dreamworks (DWA) to buy from neutral, citing upside from its upcoming film releases. The firm raised its target to $50 from $35.
• Colgate (CL) was upgraded to conviction buy from buy at Goldman.
• F5 Networks (FFIV) was upgraded to buy from neutral at BofA/Merrill.
• Applied Industrial (AIT) was upgraded to overweight from equal weight at Stephens.

Morgan Stanley (MS), one of the world's top investment banks, is scheduled to discuss its fourth-quarter 2009 financial results in a conference call Wednesday, Jan. 20, at 11:00 AM (ET), which will include CEO James Gorman. You can catch the live webcast of the call on the company's website.

During the three months that ended in December, the New York-based firm launched its Morgan Stanley Private Wealth Management initiative, saw management changes and declared a quarterly dividend. Analysts surveyed by Thomson Reuters are looking for Morgan Stanley to report earnings of $0.36 per share, compared to loss of $2.34 per share a year ago and earnings of $0.27 in the third quarter. Fourth-quarter revenue is expected to total $7.8 billion.

Last week, JPMorgan Chase & Co. (JPM) led off the coming parade of earnings from the big banks when it reported better-than-expected fourth-quarter and full-year earnings, though its revenue fell short of estimates.

Plenty more earnings from the financial sector are due out this week. Analysts surveyed by Thomson Reuters anticipate fourth-quarter earnings growth from American Express Co. (AXP), Bank of New York Mellon Corp. (BK), Hudson City Bancorp Inc. (HCBK), SLM Corp. (SLM) and US Bancorp (USB).

Analyst Upgrades

• Baird upgraded Intel (INTC) to outperform from neutral and has a $26 target on the stock. The firm's checks indicate tier-one PC OEMs have raised their 1H10 procurement forecasts, which could lead to Intel outperformance.
• Citigroup upgraded UnitedHealth (UNH) to buy from hold on expectations the company will benefit from a sector rotation into Managed Care in 2010. The firm raised its price target on shares to $39 from $30.
• UBS upgraded Morgan Stanley (MS) to buy from neutral based on strong capital and liquidity positions, building investment banking pipelines, and expectations for a turn in EPS/ROE, among other reasons.
• Deutsche Bank upgraded the U.S. Refining group as it believes demand is improving and margins could expand in 2010. The firm raised its rating on Sunoco (SUN) to hold from sell and its target on shares to $25 from $18, and upgraded Tesoro (TSO) and Frontier Oil (FTO) to buy from hold.
• Boeing (BA) was raised to overweight from equal weight at Barclays.
• Wynn Resorts (WYNN) was upgraded at UBS to buy from neutral.
• Investors Bancorp (ISBC) was upgraded to buy from neutral at Janney Montgomery.