Over the past few years, the shareholders of H&R Block (HRB) have taken many hits. The recession slowed growth and the company's digital strategy has been lacking.

But there are some signs that things are improving. In fact, on news of H&R Block's fiscal third-quarter results, the stock is up about 5%.

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Tax specialist H&R Block (HRB) is slated to take the earnings stage tonight, with Wall Street anticipating a fiscal second-quarter loss of 38 cents per share -- right in line with the firm's year-ago deficit. HRB has been a solid performer on the earnings front, as the company has surpassed analysts' bottom-line expectations in each of the past four quarters.

Judging by today's option activity, traders are anticipating another upside surprise from HRB. Within the first two hours of the session, no fewer than 13,000 calls crossed the tape -- absolutely dwarfing HRB's average daily call volume of just 4,012 contracts.

H&R Block (HRB) closed down 10% Thursday after announcing an agreement to acquire TaxACT for $287.5 million in cash. Puts were active on 77,000 contracts. November put option implied volatility is at 69, January is at 63, April is at 61, above its 26-week average of 37, according to Track Data, suggesting larger price movement.

MBIA (MBI), a financial holding company, rallied 16% on active call option volume of 75,000 contracts and put volume of 11,000 contracts. November call option implied volatility of 76, January is at 63, versus its 26-week average of 74, according to Track Data, suggesting non-directional price movement.

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

It's been brutal for H&R Block (HRB). Its stock has gone from $23 to $12.50 a share over the past year. But in the latest earnings report, there was some hopeful news for shareholders. In fact, H&R Block's shares were up 8% following the report. However, there are still challenges for the company and its probably better to look at the stock early next year, at the start of the new tax season.

In the fiscal first quarter, H&R Block posted a loss of $130.7 million, or $0.41 per share. Of course, the shortfall is normal because of the seasonality in the business.

Investors nervous about the possibly stalled economic recovery -- or worse, the beginning of the latter phase of a double-dip recession -- were not pleased with last week's housing numbers. Things were perhaps ameliorated somewhat by durable goods order numbers and a revised GDP that weren't as bad as expected, but that didn't stop the Dow from dipping below 10,000 later in the week, before fighting its way back above the benchmark to end the week, thanks largely to Fed chair Bernanke's comments on Friday.

Though the end of August is usually quiet, this week lots more economic data are due out, including more housing numbers: The Case-Shiller Home Price Index for June on Tuesday, construction spending numbers for July on Wednesday, and NAR's pending home sales for July on Thursday. There's not expected to be much to get excited about in these numbers.

H&R Block (HRB) was in focus Tuesday morning, thanks to an SEC filing Monday that revealed Soros Fund Management boosted its stake in the tax preparer during the second quarter. The equity has inched moderately higher Tuesday morning, but option volume has soared well beyond HRB's usual levels. Within the first hour of trading, put volume surged to roughly 26 times the norm, with about 4,300 contracts changing hands.

HRB's January 2011 11-strike put was most active, with 4,140 contracts trading within the first hour of the session. About 97% of these puts changed hands at the ask price, implying they were purchased, and implied volatility on this out-of-the-money option rose 2.9 percentage points. With just 339 contracts in open interest at the January 11 put, it's a safe bet that new positions are being opened.

All in all, it's been a tough year for H&R Block (HRB). With the slow economy, a growing number of people simply did not file tax returns. At the same time, there has been a shift towards digital alternatives, such as Intuit's (INTU) TurboTax.

For example, in late February, H&R Block gave a negative outlook for fiscal 2010. As a result, the stock plunged 13% to $17.09.

Unfortunately, this would not be the last disappointment. As of Thursday, H&R Block's stock price is off 8% to $14.12. Why? Well, the company announced that Alan Bennett will replace Russ Smyth as the CEO.

Analyst Upgrades

• Auriga upgraded Allscripts (MDRX) to buy from hold to reflect valuation and potential synergies from the company's pending merger with Eclipsys (ECLP). The firm upped its target price for shares to $20 from $19.
• SunTrust upgraded Newell Rubbermaid (NWL) to buy from neutral based on completion of its turnaround plan, stabilizing end markets and favorable comparisons. The firm has a $25 price target on the stock.
• Morgan Joseph upgraded C.R. Bard (BCR) to buy from hold based on valuation and upside to estimates from the share buyback program. The firm has a $97 price target on the stock.
• Shire (SHPGY) was upgraded to buy from hold at Lazard Capital.
• Onyx Pharma (ONXX) was upgraded to outperform from market perform at BMO Capital.
• AvalonBay (AVB) was upgraded to neutral from sell at UBS.

Analyst upgrades

• Wells Fargo upgraded Boeing (BA) to outperform from market perform. The firm is more confident about the company's earnings growth going forward.
• Oppenheimer upgraded H&R Block (HRB) to outperform from perform on expectations the company will improve performance in 2011. The firm has a $22 price target for shares.
• Deutsche Bank upgraded SunTrust (STI) to buy from hold to reflect valuation and expectations the company's credit will improve. The firm raised its target for shares to $34 from $29.
• Children's Place (PLCE) was upgraded to overweight from neutral at JPMorgan.
• Taubman Centers (TCO) was upgraded to neutral from sell at UBS.
• Cavium Networks (CAVM) was upgraded to outperform from neutral at Cowen.

The past couple years have been brutal for some retail chains because of disruptive changes in technology. For example, this week Blockbuster (BBI) said it may file for bankruptcy. With huge debts and lagging sales, the company continues to lose marketshare to online alternatives like Netflix (NFLX).

There's also the case with H&R Block (HRB). The company is feeling the pressure against rivals like Intuit's (INTU) TurboTax, which continues to grow its online business.

Late last month, H&R Block (HRB) dropped a bomb on investors. The company slashed its outlook because of the slow start of the tax season. As a result, H&R Block's stock price fell 13%.

So Monday, the company reported its official fiscal third-quarter results. Profits came to $50.6 million, or $0.15 per share, up from $47.4 million, or $0.14 per share in the same period a year ago.

Most of the S&P 500 have reported earnings results this quarter, but on tap this week are Brown-Forman Corp. (BF.B), National Semiconductor Corp. (NSM) and Pall Corp. (PLL), which are expected to post earnings growth, as well as H&R Block Inc. (HRB) and Kroger Co. (KR), which are not.

Most of the high expectations from analysts surveyed by Thomson Reuters are still with retailers this week, though. Here's a look at a few of them.

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

• American International Group Inc. (AIG) posted a big loss and warned it may require additional assistance.
• Athenahealth (ATHN) shares sank after it delayed earnings and its annual report, and warned of restatements.
• Barnes & Noble Inc. (BKS) Q3 sales jumped on popularity of the Nook reader but same-store sales declined.
• Brocade Communications Systems Inc. (BRCD) disappointing report and guidance caused a sell-off in shares.
• Dell Inc. (DELL) acquisitions and better-than-expected earnings may not be enough to stop shrinking market share.
• Gap Inc. (GPS) rose after it beat earnings estimates, raised its dividend and announced stock buybacks.

Analyst Upgrades

• Deutsche Bank upgraded Viacom (VIA) to buy from hold due to valuation and expectations that share buybacks will resume this year. The firm raised its price target on shares to $37 from $28.
• Canadian Natural (CNQ) was upgraded to outperform from neutral at Credit Suisse. The firm upgraded shares based on valuation and the outlook for heavy crude.
• UBS upgraded Key Energy (KEG) to buy from neutral, citing increased E&P well spending, a possible shorter term rally in gas activity and improved utilization. Target raised to $12.50 from $9.50.
• Shire (SHPGY) was raised to outperform from perform at Oppenheimer.
• PNC Financial (PNC) was upgraded at Bernstein to outperform from market perform.
• Pacer International (PACR) was upgraded to buy from hold at BB&T.