In this week's (November 9) Preview Section of Barron's (subscription required) I was surprised to find that on Wednesday (11/9) it is noted that Computer Sciences (CSC), Applied Materials (AMAT), and Macy's (M) reported "profits." How do they know this?

On other days they refer to the "earnings" of various companies reporting. Perhaps I am splitting hairs, perhaps it is editorial haste (like you might find on our site), or perhaps there is no difference in some people's minds? From my perspective there is a difference between earnings and profits. Every quarter, public companies report their earnings. They do not always report a profit.

The conventional wisdom is that consumer spending is what drives the U.S. economy. And consumer spending arises out of consumer confidence. Unfortunately, the signals along the road to economic recovery are mixed, what with the rising GDP growth and the dismal unemployment numbers. Its enough to leave investors scratching their heads. What barometers of consumer confidence will the coming week bring?

The TIPP Economic Optimism Index for November is scheduled for Tuesday, and the University of Michigan Consumer Sentiment Index for November is due out Friday.

Analyst upgrades:

• Bernstein upgraded General Electric (NYSE: GE) to Outperform from Market Perform Thursday after the close. The firm sees an improved risk/reward on the stock and raised its price target to $19 from $18.
• Bernstein also upgraded Amazon.com (NASDAQ: AMZN) to Outperform from Market Perform as it believes sales growth and margin expansion expectations are too low. The firm raised its target on shares to $160 from $125.
• Piper Jaffray upgraded CBS (NYSE: CBS) to Neutral from Underweight following the company's Q3 results and raised its target on shares to $13 from $12.
• JPMorgan upgraded Macy's (NYSE: M) to Overweight from Neutral to reflect the company's improving comps. The firm has a $23 target on the stock.
• Ansys (NASDAQ: ANSS) was upgraded to Buy from Hold at Jefferies.
• Travelers (NYSE: TRV) was upgraded to Buy from Neutral at Goldman.
• Air Methods (NASDAQ: AIRM) was upgraded to Overweight from Equal Weight at Stephens.

Traditional retailers haven't exactly embraced online sales channels. Sure, they all have websites, and they sell varying amounts of merchandise through them, but they've been slow to tap into the potential. When I was watching the space as an analyst at a major consulting firm (admittedly, back in 2007), many retailers equated a website to a new store opening. Finally, however, this industry is starting to see the potential of this venue, particularly when it comes to tracking consumer behavior.

When the CEO of Macy's (NYSE: M), Terry Lundgren, says that online sales are only good for 6% of last year's total sales, it's a hint. The translation: "We focus on where the revenue is" is much different from "We focus on where the revenue could be." Aeropostale (NYSE: ARO), on the other hand, sees the upside of playing in the online space, which is where it saw revenues spike 85% last year. Aeropostale has seen increases in traditional venues too, but nothing like what it's realized on the web.

So, maybe there's something to this internet, after all.

We had a lot of big names trading up to new 52 week highs again today. The overall markets were pretty flat, with the DOW closing the day down 0.14%, the NASDAQ closing the day's trading up 0.04%, and the S&P ending the day a bit lower to finish today's trading down 0.28%.

Here are a few of the names that moved higher during the day to set new 52 week highs.

Consumers are finally spending more, with September posting the first gain in more than a year. The International Council of Shopping Centers and Goldman Sachs (NYSE: GS) found that retail sales inched 0.1% higher last month. It doesn't seem like much, but a gain when you anticipate a fall is good news magnified. But, it came at the expense of great deals and other tools to entice somewhat hesitant customers into stores.

Kohl's (NYSE: KSS) and Limited Brands (NYSE: LTD) reported sales increases in September for stores open more than a year. J.C. Penney (NYSE: JCP), Macy's (NYSE: M) and Target (NYSE: TGT) posted declines, but they were better than expected. Delayed school openings thanks to a late Labor Day helped push to September sales that might have occurred in August otherwise.

Of course, all eyes are on the coming holiday season. The National Retail Federation forecasts U.S. consumer spending of $437.6 billion – up only slightly from $433.7 billion four years ago. So, we still have a lot of ground to make up before we can celebrate a recovery. As long as the situation is staying steady, though, we'll at least have a solid starting point.

MasterCard Advisors (NYSE: MA) service SpendingPulse says luxury and electronics sales headed upward last month, in a pleasant deviation from what became the norm all too long ago. A few other product categories posted gains as well – showing stability, if not a recovery. But, at this stage of the game, we'll take what we can get, right?

Luxury sales, not including jewelry, gained 3.4% year-over-year – that's an increase of $891 million. Last September, luxury goods suffered a 9.4% decline. Yet, this category is still below its September 2005 level of $94 million. Jewelry sales gained 1.2% relative to last year, compared to a year-over-year decline of 5.8% a year ago. Compared to apparel sales, this is a profound turn. In September 2008, the clothing category was off 5.7%, and this September, it was down only 2.9%.

It goes without saying that the era of the frugal consumer and a surplus of store chains has led to challenging conditions for retailers.

However, Macy's will be a survivor after the retail carnage is complete, which is why I'm Reiterating my Buy rating for Macy's Inc. (NYSE: M), first recommended on June 17, 2009 at a price of $11.23. If you bought shares of Macy's then, you're up about a fabulous 67%.

Analyst upgrades:

• Credit Suisse upgraded Hewlett-Packard (NYSE: HPQ) to Outperform from Neutral and raised its target to $55 from $44 based on earnings momentum and a bottom in the Imaging and Printing segment. Note that Dell was downgraded to Neutral from Outperform.
• Jefferies upgraded Covance (NYSE: CVD) to Buy from Hold as it believes investor expectations are more reasonable following the company's conference presentation and that its Late Stage segment should continue to post strong results. The firm raised its target on shares to $65 from $5.
• Stephens upgraded Home Bancshares (NASDAQ: HOMB) to Overweight from Equal Weight to reflect improved capital levels and a better-than-expected near-term outlook. The firm raised its target on shares to $27 from $24.
• Citigroup upgraded Macy's (NYSE: M) to Buy from Hold after meeting with management as it believes the My Macy's localization is gaining traction. The firm raised its target on shares to $30 from $15.
• Gymboree (NASDAQ: GYMB) was upgraded to Outperform from Market Perform at FBR Capital.
• DISH Network (NASDAQ: DISH) was upgraded to Outperform from Market Perform at Wells Fargo.
• Baytex Energy (NYSE: BTE) was upgraded to Sector Outperformer from Sector Performer at CIBC.

Talbots Inc. (NYSE: TLB), the fashion retailer that sold its J. Jill brand in the most recent quarter, is scheduled to discuss its second-quarter 2009 results Wednesday in a conference call at 10:00 AM ET, hosted by CEO Trudy Sullivan and other members of the senior management team. You can catch the live webcast of the call on the company's website.

For the three months that ended in July, analysts surveyed by Thomson Reuters expect the Massachusetts-based company to report that its net loss widened from a year ago to $0.52 per share. Revenue for the quarter is expected to have fallen 39.1% to $309.3 million.

Retail sales were down for the twelfth month in a row in August, according to an Associated Press report. Consumers stayed focused on what they need rather than what they want, as unemployment remains high and even those employed worry about the future of their jobs.

The silver lining, though, is that the coming holiday season might not be as bad as many thought.

Some retailers actually showed gains. TJMaxx (NYSE: TJX) and Old Navy, a Gap (NYSE: GPS) company, for example, saw year-over-year sales increases, though upscale stores generally sustained declines. The action on the discount side could be an early sign that the consumer is ready to play.

JCPenney (NYSE: JCP), a mall retailer that competes with Macy's (NYSE: M), Sears Holdings (NASDAQ: SHLD), and Kohl's (NYSE: KSS), reported Q2 earnings on Friday. How were they? They were exactly how you'd expect them to be in this environment: not so good.

Net income did beat expectations, though. According to Bloomberg, the company made 0 cents per share, but that was enough to win the analyst game since the call was for a loss of a penny per share. Total sales, however, decreased almost 8%, and same-store sales plunged well over 9%.

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

• Applied Materials Inc. (NASDAQ: AMAT) posted better-than-expected Q3 results, sending shares higher.
• AutoDesk Inc. (NASDAQ: ADSK) reported better-than-expected Q2 earnings, sending shares higher.
• Blockbuster Inc. (NYSE: BBI) had another disappointing quarter as same-store sales declined.
• CIT Group Inc. (NYSE: CIT) delayed its Q3 report due to ongoing debt restructuring and a possible bankruptcy.
• Dr Pepper Snapple Group Inc. (NYSE: DPS) Q2 earnings came in well ahead of Wall Street expectations.

Last week offered mixed messages about whether an economic recovery is indeed underway. The unemployment figures were not as bad as feared, but July sales numbers were nothing to write home about, despite the wild popularity of the so-called cash-for-clunkers program.

The question is, where has consumer confidence (and consumer spending) been? Retail is a good place to look, and as it turns out, this week several shopping mall and strip mall favorites will be reporting earnings for the most recent quarter.

Readers of this space know that the retail sector/apparel is best avoided: the era of the frugal consumer and a surplus of store chains has led to challenging conditions for retailers, to say the least.

However, there are exceptions, and Macy's (NYSE: M) is one. The argument here is that Macy's will be able to combine right-sizing of its chain and rigorous cost cuts with established brands (the Macy's chain also runs the upscale Bloomingdale's chain) to survive the downturn. Wall Street doesn't expect any improvement near-term, forecasting a 6-10% revenue decline for FY2010.