Bookseller Barnes & Noble, Inc. (BKS) has been hoping to find a potential buyer, but it appears as though its search will end with no buyer.

The book seller has been searching for months for a potential buyer, and the search will likely continue for a couple more weeks, but people close to the bidding process have stated that it looks unlikely that the company will be able to find a buyer.

Barnes & Noble (BKS) April put option volatility is at 64, July is at 61, above its 26-week average of 49, according to Track Data, suggesting larger price movement.

CBOE Volatility Index (VIX) is up 20% to an eight-month high; S&P 500 closed down 1.87%.

Volatility Monitor: CBOE DJ Industrial Average Index (DJX) is up 3.2% to 21.8.

NASDAQ (NDX) is up 3.4% to 26.7; S&P 100 Index (OEX) is up 3.3% to 23.7, according to IVolatility.

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

Barnes & Noble, the Gap, RadioShack, and Sears -- that may sound like the lineup at the local mall, but in fact they are just a few of the retailers scheduled to step into the earnings spotlight this week. Following last week's disappointing January retail sales numbers from the Commerce Department but strong fourth-quarter reports from Abercrombie & Fitch (ANF) and Nordstrom (JWN), the coming week will offer plenty more data on the sector for investors to mull over.

Walmart

Bentonville-based Walmart (WMT) offered free holiday shipping, closed its Moscow office and named a chief merchandising officer during its fourth quarter. Analysts surveyed by Thomson Reuters forecast earnings for that period to come to $1.31 per share, up from $1.17 in the same quarter of last year. The world's largest retailer also is expected to post revenues of $117.7 billion for the three months that ended in January. That's 3.5% more than a year earlier.

Borders Group, one of the two main brick-and-mortar bookstore competitors to online-only retailer Amazon (AMZN), recently filed for Chapter 11 bankruptcy. The development could present new opportunities for Amazon, which has already benefited from the growing digitization of literary content. Borders has indicated that it will close 200 stores, representing about 30% of its 642 stores in operation. The stores are expected to close by April 2011.

Analyst Upgrades

• U.S. Steel (X) to buy from neutral and Barnes & Noble (BKS) to neutral from sell at Goldman.
• Salesforce.com (CRM) to buy from hold at Jefferies.
• Dollar Tree (DLTR) to overweight from equal weight at Barclays.
• Edison International (EIX) to hold from sell at Citigroup.
• Analog Devices (ADI) to overweight from neutral at JPMorgan.

There's a new industry in the making. It's in the way we buy and read books. Electronic books, or e-books, are taking the book market by storm. Here's a mind blowing statistic. Barnes & Noble (BKS) announced that in December its e-book sales exceeded print books, as reported in MSNMoney.

The two big leaders in the e-book market are Amazon.com (AMZN) and Barnes & Noble with the Kindle and Nook readers respectively. Both companies said that e-readers are their best-selling product of all time.

Rumors have been circulating for almost a month about Borders' (BGP) possible bankruptcy filing. People familiar with the situation told The Wall Street Journal that the filing could come as early as the middle of this month.

Borders has been trying to hold off the filing by delaying payments to vendors. But this is only temporary. Now the matter has reached a critical stage. The company has obtained about $500 million to $550 million in debtor in possession financing that would keep the company operating after a court filing.

Analyst Upgrades

• TCF Financial (TCB) to buy from hold at Deutsche Bank.
• Exelon (EXC) to market perform from underperform at Wells Fargo.
• Nvidia (NVDA) and Boyd Gaming (BYD) upgraded to overweight from equal weight at Barclays.
• Estee Lauder (EL) to buy from neutral at UBS.
• Webster Financial (WBS) to buy from hold at Jefferies.
• Skilled Healthcare (SKH) to outperform from market perform at Morgan Keegan.
• Acorda Therapeutics (ACOR) to outperform from market perform at Leerink.
• NCR Corp. (NCR) to outperform from neutral at Wedbush.
• Barnes & Noble (BKS) to neutral from underperform and Pioneer Natural (PXD) to outperform from neutral at Credit Suisse.
• Autodesk (ADSK) to buy from neutral at Goldman.

Shares of bookseller Barnes & Noble (BKS) traded sharply lower in the opening minutes of the trading session after the company reported disappointing second quarter results.

Going into this morning's earnings report, analysts had expected a loss of 8 cents per share for the quarter. BKS reported a much worse loss of 22 cents per share.

Analyst Upgrades

• Citigroup assumed coverage of Illinois Tool Works (ITW) and upgraded shares to buy from hold with a $52 price target. Citi cites valuation and the company's successful execution for the rating change.
• UBS upgraded Rowan Companies (RDC) to buy from neutral based on better-than-expected dayrates in the high specification jack-up market. The firm raised its price target to $42 from $28.
• UBS also upgraded NetLogic (NETL) to buy from neutral and keeps a $33.50 target on the stock. The firm upgraded shares based on valuation and solid long-term outlook.
• AvalonBay (AVB) and BRE Properties (BRE) were upgraded to neutral from underperform at Macquarie.
• Covance (CVD) was upgraded to equal weight from underweight at Morgan Stanley.
• Reynolds American (RAI) was upgraded to neutral from underperform at BofA/Merrill.

When there's uncertainty to a thesis, I'm not inclined to buy. That might seem obvious on the surface, but I know there are a lot of individual speculators out there who would disagree with me. Take a roll of the dice, they might say. Uncertainty can lead to huge gains, they might counter. Well, it depends on the situation, I suppose. In the case of Barnes & Noble, Inc. (BKS), I think I'll take my chances elsewhere.

At the time of this writing, shares of the bookseller were off by more than 4% in the afternoon session, coming in at $14.36. Volume wasn't yet above average, however.

Bookseller Barnes & Noble (BKS) is slated to take its turn in the earnings spotlight before the opening bell Tuesday, Aug. 24. It's not exactly business as usual for Barnes & Noble, though -- with a proxy battle waging between Chairman Leonard Riggio and activist investor Ron Burkle, there's going to be an unusually harsh media glare on the quarterly results.

Of course, it's not just the financial media who will be eager to get a glimpse at Barnes & Noble's performance. Investors will also be chomping at the bit ahead of the firm's annual meeting, because Burkle has proposed a slate of three nominees for the retailer's board, and Riggio's seat is among those up for reelection. As Reuters' Phil Wahba explained it on Friday, "the extent of the damage is likely to affect who shareholders vote for at next month's annual meeting."