Microsoft (NASDAQ: MSFT), a competitor of IBM (NYSE: IBM) and Google (NASDAQ: GOOG), will report its earnings for the fourth quarter on Thursday. According to Trey Thoelcke's earnings summary, the software giant will be expected to produce sales of about $15 billion on earnings per share of 47 cents. These numbers would represent double-digit growth rates for each metric.

According to this estimates page at AOL Finance, Microsoft has cultivated a reputation for being reliable when it comes to delivering on Wall Street expectations. It certainly has the assets to keep this trend going. The company's operating-system monopoly, as well as its incredible success with the Office suite of products, guarantees a steady stream of cash flow and bottom-line predictability. Other investments, such as the Xbox 360 and the company's various Internet properties, aren't as guaranteed. In fact, Microsoft has engaged a very strange battle (strange to me and others, at least) to buy Yahoo! (NASDAQ: YHOO) to bolster its future prospects on the 'net.

So, here's what investors should be looking for. I will be very interested in what management has to say about its thoughts regarding Yahoo! and its utility for Microsoft. Is it an absolute necessity? I doubt it, and I really do hope that shareholders will finally get some closure on this subject. The best thing would be for Microsoft to announce that it is done with the portal. And in terms of the Xbox 360, I would be interested in hearing any new marketing strategies being readied for the holiday season and if the current recessionary environment will have any effect on sales. Microsoft recently reduced the price for one Xbox 360 model as a way of increasing that system's value proposition in relation to the Sony (NYSE: SNE) PlayStation 3 and the Nintendo (OTC: NTDOY) Wii. The company also has entered partnerships with General Electric's (NYSE: GE) NBC Universal and Netflix (NASDAQ: NFLX), according to Variety, to make its Xbox Live asset even more attractive to users looking for cool content such as movies and TV shows.

Brand-Name Stocks Uner $10: Buyer Beware
These well-known names in the bargain bin may look appealing, but experts advise laying off until their earnings picture is clear. Among the stocks to be weary of are Sprint Nextel, Motorola, Ford Motor, Qwest, Washington Mutual, Northwest Airlines, Del Monte, Rite Aid, Chico's, Crocs, United Airlines, Palm, Sealy, Blockbuster, Circuit City and Orbitz.
Brand-Name Stocks Under $10: Buyer Beware

How to Play the Market in the Second Half of 2008
Market pro Todd Harrison discusses the top 10 themes for the rest of the year.
Where we are and where we're going: 10 market themes - MarketWatch

Finding Safety in a Bear Market
Here are five ways to protect your portfolio.
Keeping Your Balance in a Scary Market - Kiplinger.com

Netflix (NASDAQ: NFLX) shares are falling after an analyst at Thomas Weisel downgraded the stock to "Market Weight" from "Overweight" on concerns about increased competition. Technical indicators for NFLX are bearish and steady. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on NFLX.

After hitting a one-year low of $15.62 in July, the stock hit a one-year high of $40.90 in April. This morning, NFLX opened at $30.24. So far today the stock has hit a low of $29.81 and a high of $31.12. As of 12:40, NFLX is trading at $30.71, down 0.41 (-1.3%). The chart for NFLX looks bearish and steady.

For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $42.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 6.4% return in three months as long as NFLX is below $42.50 at September expiration. Netflix would have to rise by more than 9% before we would start to lose money. Learn more about this type of trade here.

NFLX hasn't been above $41 at all in the past year and has shown resistance around $32.50 recently. This trade could be risky if the company's earnings (due out in mid-July) are a positive surprise, but even if that happens, this position could be protected by resistance NFLX might find just above $40, where the stock topped out in April.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in NFLX.

Alcatel-Lucent (NYSE:ALU) was upped to "neutral" from "sell" at Goldman Sachs, according to MarketWatch.

Merrill Lynch resumed coverage of Yahoo! (NASDAQ:YHOO) with a "neutral" rating, according to Briefing.com. The news service also reports that Thomas Weisel downgraded NetFlix (NASDAQ:NFLX) to "market weight" from "overweight".

Douglas A. McIntyre is an editor at 247wallst.com.

Kaufman Brothers reiterated its "hold" on NetFlix (NASDAQ: NFLX) ahead of the company's analyst meeting, according to the AP.

Merrill Lynch upgraded UBS (NYSE: UBS) from "neutral" to "buy," according to Briefing.com. The news service also reports that JPM upgraded Nvidia (NASDAQ:NVDA) from "market perform" to "outperform."

WebMD (NASDAQ:WBMD) was raised to "buy" from "hold" at Citigroup, according to 24/7 Wall St.. The financial site also reports that Peabody Energy (NYSE:BTU) was raised to "buy" from "neutral" at UBS.

Douglas A. McIntyre is an editor at 247wallst.com.

The markets saw a hard day, and you can thank oil and the Fed if you were bullish this morning. Oil magnate T. Boone Pickens issued a $150 oil prediction for 2008, and oil went over $129 for the first time today. The Federal Reserve governors are also getting the markets more and more used to no rate cuts ahead, and producer prices still showed excessive inflation on the wholesale side of the economy. These are unofficial closing prices:

• DJIA 12,834.95 (-193.21; -1.48%)
• S&P500 1,413.87 (-12.76; -0.89%)
• NASDAQ 2,492.26 (-23.83; -0.95%)
• 10YR-TBond 3.776% (-0.0630)
• 52-WEEK LOWS
• TOP 10 ANALYST CALLS.

Citigroup, Inc. (NYSE: C) saw shares down almost 4% at $22.11 at the end of the day on more cautious banking comments out of Oppenheimer's Meredith Whitney.

The Home Depot, Inc. (NYSE: HD) saw a miserable report as you'd expect, and this sent shares down over 5% to $27.25 by the end of the day.

Netflix, Inc. (NASDAQ: NFLX) was up over 1% at the end of the day at $31.40, but shares had been much higher on an upgrade this morning.

Despite having somewhat in-line earnings compared to lowered estimates, Target Corporation (NYSE: TGT) saw shares fall 1% to $54.29.

MOST NOTEWORTHY: Progressive, Netflix and Public Service Enterprise Group were today's noteworthy upgrades:

• Wachovia upgraded Progressive (NYSE: PGR) to Market Perform from Underperform based on modest signs of improvement in underwriting trends.
  
• Lehman upgraded Netflix (NASDAQ: NFLX) to Overweight from Equal Weight based on strong core trends and a potential announcement of digital service partners into its May 28 investor day.
  
• Credit Suisse upgraded Public Service Enterprise Group (NYSE: PEG) to Outperform from Neutral based on earnings growth through utility investment, valuation, upside from U.S. CO2 policy.

OTHER UPGRADES:

• Precision Drilling (NYSE: PDS) was raised to Outperform from Sector Perform at RBC Capital.
  
• Hertz Global (NYSE: HTZ) was upgraded at Soleil to Buy from Hold.
  
• Calyon upgraded Foundation Coal (NYSE: FCL) and Arch Coal (ACI) to Add from Neutral.

Many home TVs now have five or six boxes on top of them: TV cable boxes, DVRs, satellite dish devices and perhaps an Unbox from Amazon (NASDAQ: AMZN). NetFlix (NASDAQ: NFLX) wants to add to that gadget explosion.

NetFlix already has 8.2 million subscribers, so it does have a built-in base that many competitors do not. Its new device will only cost $99 and will give instant access to a large list of titles. According to The News York Times, the new system "will allow customers to play thousands of movies and shows on their televisions instantly, for no charge beyond their normal subscription fee."

While it is impossible to handicap the success of these products, the NetFlix offering may do well. For starters, very few competitors start with huge pools of customers who are already buying products from them. In addition, the box is remarkably cheap. While the selection of titles is not special, the cost of playing them is modest because there is no fee beyond the standard NetFlix subscription fee.

NetFlix still has to deal with the problem that the number of wires into the TV is way too large.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

EMC (NYSE:EMC) Cut To Market Perform from Outperform at Bernstein, according to 24/7 Wall St. The financial website also reports that Netflix (NASDAQ:NFLX) Raised to Overweight at Lehman.

Thomas Weisel initiates Walgreen (NYSE:WAG) as "overweight" according to Briefing.com. Friedman Billings has taken Symantec (NASDAQ:SYMC) off its "best picks" list.

Douglas A.McIntyre is an editor at 247wallst.com.

Blockbuster (NYSE: BBI) announced first-quarter earnings on Thursday, and while it beat the market's expectations, I can't say I'm terribly excited. Revenues decreased a little over 5% to $1.4 billion. Net income from continuing operations came in at $0.21 per diluted share. Briefing.com says that this performance was $0.06 better than Wall Street's average call. Revenues, however, missed expectations.

Why am I not excited about the performance here? I mean, not only did the bottom line trounce the wizards of Wall Street, but domestic comps increased 2.9%. Well, for one thing, the cash flow was nonexistent. Both operational and free cash-flow were negative; granted, the company used a lot less cash this time for operations, and the deficit in terms of free cash was much better, but still, I don't see any positive green.

Plus, there's just the general idea of Blockbuster itself. My feelings haven't changed since I last wrote about the movie-rental business and its earnings. I still believe that Netflix (NASDAQ: NFLX) and video-on-demand limit the upside potential of the company's long-term prospects (perhaps I shouldn't just say limit; maybe threaten is better terminology, who knows).

The earnings party of last week was full of fun and frolic. For the most part, if you followed my list of recommendations, you would have had your very own "Fiesta de Finance." (See Week in Preview – May 5)

The earnings season is still in full swing and should provide a great deal of action for the companies that will be reporting. But these companies will have to fight through a few new economic barriers. With oil pushing past historic levels and questions beginning to surface concerning the ability of the investor to continue to support a market that has so many headwinds, the mood is likely to shift moving forward. It is time for discipline, short and simple. Now, more than ever investors need a plan. I cover this strategy in my book, The Disciplined Investor.

In the last installment of The Week in Preview, I was looking for party opportunities in honor of Cinco de Mayo. This week, Misery is the theme. That is the only word that comes to mind with oil at a level that you would have never expected, a massive and unrelenting credit and housing crisis and a banking system that is defunct.

Monday - May 12

We start the week with a report from IndyMac Bancorp (NYSE: IMB). This bank is smack in the middle of the housing problem. It is primarily a lending company that facilitates loans for single-family homes. It's also involved in the origination and trading of mortgages. How does that sound to you as an investment? Shares have slid from $23 in October 2007 to an unbelievable level of $3.50 recently. Ouch... If you are a shareholder still holding on with hope and a prayer for something...anything, keep on dreaming. The good news is that the stock is sporting a yield of 29%. But, if you think that yield is going to be maintained, I have a bridge for sale. Estimates are for a loss of $1.92 per share for the quarter.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

Way back when, the movie-rental wars were fought between the neighborhood video stores (which had limited availability) and the superchain Blockbuster (NYSE: BBI) (which had limited availability except for the Die Hard series). Then, Netflix (NASDAQ: NFLX) came along with an amazing business model. Set up an account online, build a mammoth list of movies (from tens of thousands available), receive a few in the mail and send them back when you're done -- no late fees, but you only got new movies when you sent old ones back.

At the time, Blockbuster -- and many consumers -- didn't think it would work. First of all, you had to wait a day or two to get new movies; and second of all, who was going to want to deal with sending movies back in the mail? I mean, gosh. Well, eventually, Blockbuster caved and started the same kind of service. When you compare the two, however, which one takes the cake?

What Netlix Offers: For $16.99, you receive three DVDs in the mail. These movies come from the top of the personliazed list you create on the Netflix site. Delivery times vary, but local distribution centers can usually get them to you in two days. You can keep these DVDs as long as you want; but, if you never return them you never get anything new. Which is a real bummer when I Am Legend is gathering dust on your TV set. After you've watched one, or more, send it back in the provided postage-paid envelope. Within a few days, your next movie arrives in the mail. As of now, Netflix offers a total of nine (9) membership plans, from one-at-a-time to eignt-at-a-time. You can also purchase DVDs through the site, in addition to watching certain movies for free.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Amazon.com Inc. (NASDAQ: AMZN) profits rose 30%, easily beating analysts' expectations.
• AMETEK Inc. (NYSE: AME) beat Q1 estimates on global strength and recent acquisitions.
• Apple Inc. (NASDAQ: AAPL) easily beat Q2 expectations but offered a weak outlook.
• AT&T Inc. (NYSE: T) posted strong Q1 results thanks to the popularity of the iPhone.
• Baidu.com Inc. (NASDAQ: BIDU) beat earnings and saw an upgrade from Citigroup Inc. (NYSE: C).
• Broadcom Corp. (NASDAQ: BRCM) Q1 profit soared, and it raised its guidance.
• Cymer Inc. (NASDAQ: CYMI) beat Q1 estimates and announced a share million buyback program.
• Electronic Data Systems Inc. (NYSE: EDS) posted Q1 profits on cost cutting and new contracts.
• EMC Corp. (NYSE: EMC) Q1 earnings fell on on acquisition-related charges.
• Hexcel Corp. (NYSE: HXL) beat Q1 estimates on increased commercial aerospace sales.
• Huaneng Power ADS (NYSE: HNP) earnings plunged on coal prices, but the stock went higher.
• Level 3 Communications Inc. (NASDAQ: LVLT) narrowed its loss on higher sales of networking services.
• McAfee Inc. (NYSE: MFE) Q1 profit plunged on product development and marketing costs.
• MEMC Electronic Materials Inc. (NYSE: WFR) missed analysts' estimates for the first quarter.
• Microsoft Corp. (NASDAQ: MSFT) beat earnings expectations and raised its full-year guidance.
• Netflix Inc. (NASDAQ: NFLX) profit soared in the first quarter on increase in subscriptions.
• Nintendo Co. (OTC: NTDOY) posted record results due to the popularity of the Wii system.

Today, we can blame the market almost entirely on OIL and THE DOLLAR. Oil rose to a dime within $120.00 today before selling off and the dollar is becoming the PESO with the reading having hot $1.60 per EURO. Interestingly enough, the oil services stocks are not performing well in earnings season despite record prices. More importantly, today's stock market shows that the market is still in a state of flux, and it may have become a stock picker's market. Until this finally doesn't work, the trade is to buy when you feel worried and sell when you are feeling good. Below are today's unofficial market index closing levels:

• DJIA 12,720.31 (-104.71; -0.82%)
• S&P 500 1,376.00 (-12.17; -0.88%)
• NASDAQ 2,376.94 (-31.10; -1.29%)
• 10YR-TBond 3.72% (+0.008%)
• 52-WEEK LOWS
• MAJOR SHORT INTEREST

Brinker International, Inc. (NYSE: EAT) saw shares rise by after the company narrowly bear earnings expectations. The company is one of "stocks to double" by the recession end, and cost cutting and capacity monitoring did more goodwill today than the earnings. Shares were up by almost 7% at $20.90 in the final minutes of the day.