After hitting a one-year high of $53.25 in May, the stock hit a one-year low of $36.01 in March. JPM opened this morning at $42.18. So far today the stock has hit a low of $41.28 and a high of $42.70. As of 12:10, JPM is trading at $41.91, up $0.41 (1.0%). The chart for JPM looks neutral but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a May bull-put credit spread below the $35 range. A bull-put credit spread is an options position that combines the purchase and sale of put 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 an 8.7% return in just one month as long as JPM is above $35 at May expiration. JPMorgan would have to fall by more than 16% before we would start to lose money. Learn more about this type of trade here.

U.S. stock futures were down slightly this morning, reflecting nervousness about economic data and earnings reports due out today.

Stocks fell Tuesday for the second session in a row after disappointing earnings from Wachovia surprised the market. The Dow industrials ended the day down 23 points, the S&P 500 lost 5 points, and the Nasdaq Composite fell by 14 points.

In the news, Delta Air Lines (NYSE: DAL) and Northwest Airlines (NYSE: NWA) announced yesterday that they will combine to form the world's largest airline, with a market value of $17.7 billion. The new airline will be called Delta. United and Continental may be next in line to tie the knot.

In another blow to the ailing airline sector, oil prices rose to an intraday record of more than $112 a barrel Tuesday as the U.S. dollar continued to weaken against other major currencies.

There was evidence of continuing deterioration in the housing market -- according to a report by RealtyTrac for March, U.S. foreclosure filings rose 57% and bank repossessions more than doubled from last year. However, there was some good news from Detroit as Ford announces plans to step up production of the compact Focus by 30% to meet strong demand.

Economic data due out today includes the Producer Price Index, a measure of wholesale inflation, at 8:30 a.m. EST, the Empire State Manufacturing Survey at 8:30 a.m. EST, and the Housing Market Index at 1:00 p.m. EST.

It is a huge day for earnings, with BHP Billiton (NYSE: BHP), Johnson & Johnson (NYSE: JNJ), M&T Bank (NYSE: MTB), State Street (NYSE: STT) all reporting before the open. After the close, all eyes will be on Intel and Washington Mutual, as they report earnings.

Analysts surveyed by Thomson Financial expect M&T Bank Corp. (NYSE: MTB) and US Bancorp (NYSE: USB) to post smaller profits in the first quarter. Both banks are scheduled to report results on Tuesday.

M&T is expected to earn $1.55 per share, which is down marginally from the same period in 2007 when it earned $1.57. The company missed quarterly estimates in the past two quarters. In the third quarter of 2007, it fell short of the consensus estimate by 5.3%, and in the fourth quarter by 63.1%.

M&T is based in Buffalo, New York. M&T Bank offers deposit accounts and loans to individuals and small and mid-sized businesses, and its subsidiaries provide brokerage, leasing, loan servicing, and other services. In the past year, its revenues were $4.6 billion and its net income totaled $654 million. Its EPS growth forecast for the year is 14.1%, better than the banking industry average and the S&P 500. Yet the consensus recommendation of analysts continues to be to hold M&T.

The stock has fallen 20.6% in the past year and trades at a P/E of 14.05. Shares closed Friday at $83.62.

The quarter has hardly begun and, with analysts and investors watching nervously, the earnings crunch is about to begin anew. The following 11 big banks are among companies reporting results the week of April 14 to April 18.

These three are expected by analysts surveyed by Thomson Financial to be the the top performers in the first quarter, based on earnings growth from the same period of last year:

• State Street Corp. (NYSE: STT): 39%
• Bank of New York Mellon Corp. (NYSE: BK): 22%
• Northern Trust Corp. (NASDAQ: NTRS): 13%

These also happen to be three of the four forecast top performers from just before fourth quarter of 2007 results were reported back in January.

For more earnings forecasts, see Peter Cohan's Earnings expectations for 10 banks tell a mixed story.

Thomson Financial expects M&T Bank Corp. (NYSE: MTB) to earn $1.63 when it announces its fourth-quarter earnings on January 14th. That's down 13% from the same period in 2006 when it earned $1.88.

M&T Bank is a Buffalo, NY-based bank operating in five segments: Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking. In the last year, its revenues were $3.5 billion and its net income totaled $803 million. Its stock has lost 39% of its value in the last year and it trades at a P/E of 10.4.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in M&T Bank securities.

MOST NOTEWORTHY:

• Intel Corp (NASDAQ: INTC) was upgraded to Overweight from Neutral at JP Morgan based on expectations for margin expansion in 2H07 driven by share gains, stable pricing, and lower costs. Shares were upgraded to Buy from Neutral at American Technology as the firm believes the price war is ending sooner than expected and that NOR Flash could be divested soon.

• Caterpillar Inc (NYSE: CAT) was upgraded at Wachovia to Outperform from Market Perform to reflect a re-acceleration in earnings growth and a lower probability of a recession.

• Soleil upgraded shares of Wells Fargo & Co (NYSE: WFC) to Buy from Hold as the firm believes WFC is an attractive late-cycle play with above-average growth prospects and superior risk management.

• Merrill Lynch upgraded shares of M&T Bank (NYSE: MTB) and Regions Financial (NYSE: RF) to Buy from Neutral, citing valuation. Oppenheimer upgraded M&T Bank to Neutral from Sell based on valuation and revised estimates. Keefe Bruyette raised Regions Financial rating to Market Perform from Underperform.
  

• Susquehanna upgraded shares of NICE Systems Ltd (NASDAQ: NICE) to Positive from Neutral as the firm expects strong execution from the company's robust product set and increased market share following the Verint Systems' (VRNT) acquisition of Witness Systems (WITS).

• Comerica (NYSE: CMA) was upgraded to Sector Perform from Underperform at RBC Capital.

• JP Morgan upgraded Interpublic Group of Cos (NYSE: IPG) to Overweight from Neutral.

• ThinkEquity upgraded Trimeris, Inc (NASDAQ: TRMS) to Source of Funds from Sell.

Warren Buffett's Berkshire Hathaway, Inc. (NYSE: BRK.A) has been adding to its bank holdings. Should you get in to these stocks now?

Since Buffett has obtained waivers from the SEC to delay reporting of his holdings, it's not safe to conclude that his bank stock portfolio is currently where it was just disclosed. This reporting delay is an example of the golden rule -- he who has the gold makes the rules. And I don't think it is fair to investors and all the other fund managers who must report their holdings on a more timely basis.

Nevertheless, here's my analysis of BRK's bank holdings -- I've put the number of shares BRK.A owns in parentheses:

• U.S. Bancorp (NYSE: USB) (23.3 million) -- Good company, expensive stock. USB offers many fee-based businesses which generate good cash flow with lower credit risk such as wholesale banking; payment services; private client, trust and asset management, and consumer banking. USB generated $12.3 billion in revenue and $4.7 billion in profit in the last 12 months -- growing at a five-year compound annual growth rate (CAGR) of 2.3% and 25.3% respectively. USB is up 19.4% in the last year and its dividend yield has grown at a five-year CAGR of 3.5% to 4.41%. USB trades at a P/E of 13.9 and its earnings are forecast to grow 9% from $2.77 in 2007 to $3.02 in 2008. At a Price/Earnings to Growth (PEG) ratio of 1.54 the stock looks a bit expensive to me, although the dividend is attractive.
• Wells Fargo & Co. (NYSE: WFC) (204 million) -- Good company, expensive stock. WFC's Community Banking serves consumers and small businesses with sales less than $20 million; its Wholesale Banking segment serves US businesses with sales above $10 million; and its Wells Fargo Financial provides consumer and auto finance. WFC generated $32.2 billion in revenue and $8.5 billion in profit in the last 12 months -- growing at a five-year CAGR of 11.5% and 20.1% respectively. WFC is up 14.5% in the last year and its dividend yield has grown at a five-year CAGR of 2.9% to 3.15%. WFC trades at a P/E of 14.4 and its earnings are forecast to grow 11% from $2.74 in 2007 to $3.03 in 2008. At a PEG ratio of 1.31 the stock looks a bit expensive to me, although the dividend is attractive.
• M & T Bank Corp. (NYSE: MTB) (6.7 million) -- Fair company, expensive stock. MTB offers credit and deposit, trust and investment services to consumers, businesses, professional clients, governments and financial institutions in New York State, Pennsylvania, Maryland, northern Virginia and Washington, D.C.. MTB generated $3.3 billion in revenue and $839 million in profit in the last 12 months -- growing at a five-year CAGR of 9.5% and 18.9% respectively. MTB is up 12.6% in the last year and its dividend yield has grown at a five-year CAGR of 1.5% to 1.97%. MTB trades at a P/E of 16.7 and its earnings are forecast to grow 9% from $7.88 in 2007 to $8.62 in 2008. At a PEG ratio of 1.86 the stock looks expensive to me.

I like USB and WFC, MTB not so much. I don't know how Buffett makes his investment decisions but it might not be a bad idea to try to read about Buffett's approach and see how well these bank investments fit.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm, He also teaches management at Babson College and edits The Cohan Letter. He owns shares in Wells Fargo and has no financial interest in Berkshire Hathaway, M & T Bank, or US Bancorp.