On Thursday, Dillard's (DDS) announced that it plans to form a wholly-owned real estate investment trust. The company will transfer some of its properties to the REIT and then lease back the properties from the entity. The company said that the move may enhance its ability to access debt or preferred stock and improve its liquidity.

The market is currently pricing REITs at rich valuations, and the transaction will allow Dillard's to better monetize its significant real-estate assets. By transferring these holdings into a publicly traded REIT, Dillard's should be able to unlock additional shareholder value. According to Craig Johnson, an analyst at Customer Growth Partners, "the sum of the parts can be greater than the sum of the whole."

Tuesday morning, Sears Holding (SHLD) released a bit of good and a bit of bad news. Let's start with the bad news.

The retailer announced that its same-store sales dropped 1.7% during December. The company's eponymous Sears stores saw December same-store sales fall 6%, more than offsetting Kmart's 2% growth. The firm blamed the sales drop at Sears on a major decline in sales of consumer electronics, along with appliances and tools.

It's been a strange marriage right from the start. Kmart, the discounter, joined with Sears, the department store retailer in 2005.
Both lines are in stiff competition with other brands, the USA Today reports. Kmart's competing with Walmart (WMT) and Target (TGT), while Sears's competitors include Home Depot (HD) and Lowe's (LOW).

The Kmart-Sears combo has been lagging in the retail sector. On Thursday, Sears Holdings (SHLD) posted a loss of $218 million or $1.98 per share, compared with a loss of $127 million or $1.09 per share in the period last year. Revenue fell 5% to $9.68 billion. Analysts had expected $9.89 billion.

Freeport McMoRan (FCX) closed up $1.52 to $84.51. Copper prices closed up 2.54% according to Bloomberg. Overall option implied volatility of 40 is near its 26-week average of 43 according to Track Data, suggesting non-directional price movement.

Sears Holding Corporation (SHLD) closed up $3.62 to $71.77. SHLD October call option implied volatility is at 38, puts are at 54. This is versus its 26 week average of 42, according to Track Data. Active volume suggesting larger price movement. Puts are trading higher than calls on SHLD being difficult to borrow.

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

Below are some highlights from this past week's earnings coverage on BloggingStocks. Click through to the original posts for more details.

• Abercrombie & Fitch Co. (ANF) shares sold off after it posted a narrower Q1 net loss, but same-store sales rose.
• Applied Materials Inc. (AMAT) swung from a year-ago loss to a Q2 profit that was better than expected.
• Deere & Co. (DE) reported better-than-expected Q2 earnings and improved sales, and raised its full-year outlook.
• Dell Inc. (DELL) posted better-than-expected Q1 earnings, but the gross margin was disappointing, and shares fell.
• GameStop Corp. (GME) higher Q1 earnings beat consensus estimates but same-store sales declined.
• Gap Inc. (GPS) said its higher Q1 earnings beat expectations while revenue fell in line with estimates.

Retailer Sears Holding (SHLD) announced this morning that its first-quarter profit dropped 38%. The company blamed the drop on increased discounts that it used to promote, appliances along with dropping demand for its tools and home electronics.

During the first quarter, Sears earned 14 cents per share, which is down from 21 cents per share last year. Adjusted earnings checked in at 16 cents per share, which topped the consensus estimate of 12 cents per share. Quarterly revenue fell to $10.05 billion, which is short of the consensus estimate of $10.22 billion.

Call it Christmas come early: Last week we learned that stocks posted an average gain of about 9% for March retail sales. We also learned consumer spending in the U.S. rose in March by the most in five months, and many economists are predicting continued spending acceleration as the economy adds more jobs and gets back into the groove.

Already we've seen some red hot runs in the retail sector in anticipation of the consumer's return. Several consumer-related exchange-traded funds (ETFs) have been tearing things up on Wall Street lately -- lapping the broader market at least four times over!

There are lots of great individual retail stocks out there -- and no shortage of reasons to buy Walmart (WMT). But the fact is that blue chip retailers can often lag the broader sector, and small-cap retailers can sometimes be too volatile for many investors.

The good news is, an Internet coupon offering went viral for Kmart. The bad news is that it wasn't supposed to.

Cue the face-palms as executives for Sears Holdings Corp. (SHLD), parent of Kmart, decide the best method for damage control after at least one Kmart store manager allegedly accused a customer of fraud when attempting to use what appeared to be, or should have been, a legitimate store coupon.

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.

Tuesday morning was a big one for retail earnings, with Home Depot, Macy's, Sears and Target reporting good news.

Barnes & Noble (BKS) total sales came to $2.2 billion in fiscal third quarter, a 33% increase year over year. Earnings were $80.2 million, or $1.38 per share. However, same-store sales slipped 4.7% from a year ago to $1.4 billion, despite strength from BN.com due to demand for the Nook. The company expects comps to decline in the fourth quarter, and forecast full-year earnings below consensus estimates.

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

• Ark Restaurants Corp. (ARKR) shares declined after Q4 earnings fell short of consensus expectations.
• Azz Inc. (AZZ) Q3 net income fell more than expected but the company reaffirmed its earnings outlook.
• Bed Bath & Beyond Inc. (BBBY) reported strong Q3 results, sending shares to a new 52-week high.
• Best Buy Inc. (BBY) declined to lift its earnings forecast despite strong December sales, send shares lower.
• Constellation Brands Inc. (STZ) lower Q3 earnings topped expectations and revenue declined as well.

Today's stock market was up more than it was not throughout the trading session, yet the feeling was more of an up-day after better than expected retail data and after more and more data points to a decent jobs figure for Friday's unemployment and non-farms payrolls data. Here were today's unofficial closing bell levels:

Dow 10,607.69 +34.01 (0.32%)
S&P 500 1,141.65 +4.51 (0.40%)
Nasdaq 2,299.00 -2.09 (-0.09%)

Top Analyst Upgrades/Downgrades

Watch for some action out of mega-retailer Sears Holdings (SHLD), as the company placed its fiscal fourth-quarter earnings estimate "well above" expectations. Sears believes earnings for the current quarter will come in between $3.36 and $4.06 per share, far better than the Street's expected $2.65 per share.

The reason for the forecasting bravado is the fact that the company saw same-store sales growth during the past month thanks to strong performance from Kmart. As a matter of fact, Kmart outperformed Sears' stores in the past quarter, which it continued in the past month. Same-store sales at Kmart saw a 5.3% increase in December while Sears saw same-store sales drop 4.3%.

Last week, I talked about my recent purchase of GameStop (GME). I put forth my reasoning on the trade, mentioning the Christmas shopping season as being a potential catalyst for capital appreciation.

Well, the trade has gone horribly wrong this bleak Monday session. In case you didn't hear the news, the video-game chain sold off in a big way. As I write this, shares are off by a buck, and are priced at $24.32. The low on the day is $23.75. Volume, while not in panic-mode, is above average, and I expect it to possibly accelerate toward the end of the day.

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

• Ann Taylor Stores Corp. (ANN) declining same-store sales offset better-than-expected Q3 earnings.
• Canadian Solar Inc. (CSIQ) reached a new 52-week high after Q3 results handily exceeded expectations.
• Dillard's Inc. (DDS) said that it swung to a Q3 profit due to cost cutting as revenue declined year over year.
• GameStop Corp. (GME) reported uninspiring Q3 numbers that included a slump in same-store sales.
• Home Depot Inc. (HD) lower Q3 earnings and revenue beat analysts' estimates, but shares still declined.