On Wednesday, General Mills (GIS) will report earnings results for the fiscal third quarter. The cereal maker is expected to do okay. According to Earnings.com, net income is projected to be around 56 cents per share. If the company hits that number, then it will represent a decent bottom-line growth rate.

The stock has a couple things going in its favor. The 52-week high is currently set at $38.98. Shares closed on Monday at a price of $37.12, not far from the peak. In addition, the dividend yield of 3% is attractive.

Quarterly reports from Oracle (ORCL), Discover (DFS) and Tiffany (TIF) will highlight news on the earnings front this week.

Elsewhere on the economic calendar, the focus will be on housing, with existing home sales data due from the National Association of Realtors on Monday, new home sales numbers from the Census Bureau on Wednesday and data on housing starts released on Thursday.

Also watch for durable goods orders in February and the final GDP for the fourth quarter.

General Mills (GIS) is buying a 50% stake in Yoplait from PAI Partners for roughly $1.1 billion, Reuters reported Thursday, citing sources close to the deal.

The deal is a nice fit for both companies. Yoplait is second to Danone (DANOY) in the yogurt market. General Mills has the industry presence to promote the Yoplait brand, something that would benefit PAI.

For General Mills, Yoplait would add an another revenue stream to an already diversified conglomerate. Some of General Mills' products include cereals, Haagen-Dazs ice cream, Green Giant vegetables and Progresso soup. The company has already been distributing Yoplait for 30 years, so the distribution network is already in place.

Food giant General Mills (GIS), first discussed here on April 8, 2009, at a split-adjust price of $25.40 ($50.80 pre-split), has meandered during the past three months, but just look on that pause as a chance to scoop-up some shares of a premiere U.S. company.

And the reasons for the bullish view here are obvious enough. Demonstrated business model General Mills boasts solid brands (Cheerios, Wheaties, Lucky Charms, Total and Chex), good cash flow, economies of scale, and room for international expansion. Add productivity gain, marketing skill and a solid, split-adjust $1.12 annual dividend and GIS is one play that's hard to pass up.

General Mills (GIS) is one of a group of food processors that are being squeezed by high commodity prices. These companies are caught between a reluctant consumer and having to pay more for raw materials like wheat, corn and soybeans.

The Wall Street Journal (subscription required) reports that General Mills' profit for the quarter rose to $613.9 million or 92 cents per share, compared with $565.5 million or 83 cents per share last year. Excluding the value of commodity hedges, earnings slipped to 76 cents from 77 cents a share. Net sales rose to $4.07 billion. Volume increased 3%. Gross margins fell to 40.2% from 42.8%

After a summer stock dip, food giant General Mills (GIS), first discussed here on April 8, 2009, split-adjust price of $25.40 ($50.80 per-split), is reasserting itself, and with good reason.

General Mills boasts solid brands (Cheerios, Wheaties, Lucky Charms, Total and Chex), good cash flow, economies of scale, and room for international expansion. Add productivity gains, demonstrated marketing skill, and a solid, split-adjust $1.12 annual dividend and GIS is one play that's hard to pass up.

General Mills (GIS) option was active on call volume of 88K contracts, compared to put volume of 8K contracts. October put option implied volatility is at 28, January is at 25, above its 26-week average of 21, according to Track Data. The active call volume suggests traders taking positions for price movement.

Stocks with implied volatility below index mean range: Genzyme (GENZ), Potash (POT) and Chelsea Therapeutic (CHTP), according to IVolatility.

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

Here is a common sentiment about the stock market: "No fun at all. As I have said before, I believe it has turned into one big casino largely divorced from its original goal of providing capital to companies who produce something of value."

There's a lot of truth to what "granny" recently said to me in an e-mail. Fortunately she also noted "FYI Granny's up 5.86% + dividends." That would give her a gain of about 10% in the past ten months since I posted Where should granny put $50,000, suggesting a very conservative portfolio for an uncertain time.

Not only has she earned a very nice return, surpassing her CD account by 9.5% (20 fold), but she was able to do so with a great deal less volatility than the overall market most of us have lived through.

The calendar quarter winds down this week, and in the days leading up to the Independence Day holiday in the U.S., Apollo Group Inc. (APOL) is expected to be an earnings winner. General Mills (GIS) and Monsanto (MON) are scheduled to report quarterly results this week as well, but analysts surveyed by Thomson Reuters expect them to post smaller profits.

Analysts on average expect for-profit education provider Apollo Group to report that its fiscal third-quarter earnings rose 18.7% from a year ago to $1.55 per share. Revenue for the three months that ended in May is expected to have risen 23.2% in the past year to $1.3 billion. Apollo Group's per-share earnings have topped consensus estimates in the past five quarters, by as much as 13 cents per share. The First Call recommendation of analysts is to buy APOL and has been for more than 90 days. Shares have fallen 28.6% in the past three months and reached a 52-week low of $43.49 on Friday.

Analyst Upgrades

• Baird upgraded C.H. Robinson (CHRW) to outperform from neutral and has a $67 target on the stock. The firm upgraded shares citing growth opportunities given the capacity constrained environment.
• UBS upgraded Navistar (NAV) to buy from neutral, citing improved trucker preferences towards the company's engine technology.
• KeyBanc upgraded Crane (CR) to buy from hold based on valuation stabilization and potential upside in aerospace, among other reasons. The firm has a $39 target on the stock.
• United Therapeutics (UTHR) was upgraded to overweight from neutral at JPMorgan.
• Equifax (EFX) was upgraded to overweight from equal weight at Stephens.
• Brown & Brown (BRO) was upgraded to buy from hold at Citigroup.
  

Dole Food Company, Inc. (DOLE) is, at the time of this writing, down 76 cents to $9.98. That's a loss in value of 7%. The company had posted its Q1 numbers after the bell on Monday. The market is obviously not infatuated with them today.

According to the press release, adjusted EBITDA dropped to $85 million from $122 million. Net cash from operating activities plunged to $19 million from $39 million. These are not attractive statistics. A bad market environment in Europe and Asia apparently hurt the performance of fresh fruit.