Yet again, there is some buzz that a deal is in the works between Sprint Nextel (S) and Deutsche Telekom's T-Mobile USA. In fact, it may be more than just a rumor. In early trading Tuesday, the shares of Sprint were up nearly 6%.

In light of the need for spectrum investments, Deutsche Telekom has already said it's looking at strategic partnerships. So could this really be code-speak for a merger deal? Perhaps so.

I first discussed Sprint Nextel (S) here on December 6, 2010, at a price of $4.17, and shares did push above $4.70 this winter before retreating on the market's recent pullback. I still like the shares at this stage, though.

However, keep in mind that Sprint is a high-risk stock, not suitable for low-risk or moderate-risk investors. Don't consider Sprint if you can't tolerate a more than 50% to 70% loss or seeing your entire investment wiped out -- it could happen.

Sprint (S) is expected to report Q4 EPS on February 10. January 5 calls are active on total call option volume of 73K (19K puts). March call option implied volatility is at 48, May is at 39, August and January is at 36, compared to its 26-week average of 52, according to Track Data, suggesting larger price movement.

Proshares UltraShort 20+ Year Treasury ETF (TBT) overall option implied volatility is flat at 32, according to Track Data, suggesting non-directional price movement.

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

The battle among iPhone carriers is fierce. Apple's (AAPL) iPhone is the prized device. AT&T (T), Verizon's (VZ) rival, has had the an exclusive hold on the iPhone. Verizon has been trying to play catch up. Now that Verizon will have the iPhone, the playing field will change dramatically. Verizon, with about 93 million subscribers, could grab an estimated 10 million new subscribers with the iPhone, as reported by the Wall Street Journal.

The move is also a big boost for Apple. Apple has been feeling the pressure from Google (GOOG), with its Android system. Android phones passed the iPhone in sales in the second quarter. This move to Verizon will open up a new expanded base for Apple.

Is the tide starting to turn for much-maligned mobile phone service provider Sprint Nextel (S)? Perhaps, and the carrier is worth a review.

First, the most important warning: Sprint is a high-risk stock not suitable for low-risk or moderate-risk investors.

Don't consider Sprint if you can't tolerate a more than 50% to 70% loss or seeing your entire investment wiped out -- it could happen.

Monday was in part a merger Monday, and it was also a break-up of the correlation among markets, at least in some aspects, as the US Dollar rose. A weaker than expected Philly Fed forecast in Q4 failed to exact much pain. Still, bonds continued the sell-off as 30-Year Treasury rates hit 4.36%, the highest yields since the summer.

Here were today's unofficial closing bell levels:

Dow Jones 11,201.97 +9.39 (0.08%)
S&P 500 1,197.75 -1.46 (-0.12%)
Nasdaq 2,513.82 -4.39 (-0.17%)

Top Stock Analyst Calls

Now that Best Buy Co., Inc. (BBY) has made mobile a clear strategic priority for the largest consumer electronics retailer in the U.S., why not private label a broadband internet service and sell it? That's precisely what Best Buy is doing with Clearwire Corporation (CLWR), as it is taking the latter's 4G wireless nationwide network and branding its "Best Buy Connect" with that network.

I would bet my last dollar that someone out there has done the following: signed the necessary contract required to get that hot new smartphone with the thoughts that an escape clause will be easy to find. AT&T (T) is trying to make that escape clause much less attractive for fans of Apple's (AAPL) iPhone.

Starting June 1, AT&T customers carrying an iPhone will face a $325 termination fee if they break their two-year contract. That's a jump of roughly 85% from the current $175 fine. Ouch!

Sprint Nextel (S), which has been bleeding valuable contract wireless customers for well over a year now, continues trying to find a leadership position -- any leadership position -- and it is banking (again) on the growth in prepaid wireless to salvage its future. After it's acquisition of Virgin Mobile earlier this year, the company is set to introduce a $25 "Beyond Voice" that will give prepaid customers 300 minutes and all the messaging and data they can eat.

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

• Abercrombie & Fitch Co. (ANF) received an analyst's upgrade ahead of next week's Q4 earnings report.
• Acer Inc. reported its highest quarterly earnings in almost three years due in part to growth in shipments.
• Baidu Inc. (BIDU) swung to a better-than-expected Q4 profit, with strong revenue growth, and offered rosy guidance.
• Biogen Idec Inc. (BIIB) offered an upside surprise as well as full-year earnings above Wall Street estimates.
• Coinstar Inc. (CSTR) strong quarterly results and guidance, as well as litigation concerns, failed to inspire Wall Street.
• Coca-Cola Co. (KO) posted strong Q4 and full-year earnings results due to growth in emerging markets.

One facet of the Obama administration's sweeping stimulus initiatives of which I have taken particular interest is its protracted effort to increase our national broadband access and capabilities. In pursuit of that end, The Broadband Technologies Opportunities Program (BTOP), which seeks to build and enhance broadband access in unserved and underserved regions of our country, has been provided with over $4.5 billion in Recovery Act funds.

I am pleased to report that amazingly, BTOP has already dispensed with much of the red tape that might normally bog down an effort of this magnitude. Large chunks of BTOP funds are beginning to be granted. In the short term, the benefit of this program may well be to create jobs. In the long term, these infrastructure improvements could possibly increase the profit bases of companies such as Verizon Communications (VZ), Sprint Nextel Corp. (S), AT&T (ATT) and a host of other digital communication and entertainment providers.

Quarterly reports continue to roll out this week, with results due from Allstate Corp. (ALL), Coca-Cola Co. (KO), Marriott International Inc. (MAR), Molson Coors Brewing Co. (TAP), New York Times Co. (NYT), Pepsico Inc. (PEP), Sprint Nextel Corp. (S), Viacom (VIA), Walt Disney Co. (DIS) and many others. Here's a look at a few of the companies that analysts surveyed by Thomson Reuters expect to be the biggest earnings gainers this week.

Analysts are looking for Coinstar Inc. (CSTR), which distributes coin-counting, DVD-rental, and other self-service kiosks, to report that its fourth-quarter earnings more than doubled from a year ago to $0.32 per share. Revenue for the three months that ended in December is expected to have jumped 26.1% to $329.2 million. The analysts' forecast for the full year calls for earnings of $0.94 per share (+46.8%) on $1.2 billion in revenue (+25.9%). Coinstar has beat earnings estimates in the past three quarters, by as much as six cents per share.

While Sprint Nextel (S) continues to leach wireless customers to the larger competitors, it is propping itself up by taking the lead in prepaid wireless), and by recently winning the top spot in business customer satisfaction for both wireless voice and wireless data services from a survey of large business decision makers.

Why isn't that success translating into more contract wireless customers in the consumer sector?

Analyst Upgrades

• Deutsche Bank upgraded U.S. Steel (X) to buy from hold after raising its steel forecasts and upped its target price on shares to $77 from $44. Note, the firm also downgraded AK Steel.
• Credit Suisse upgraded Philip Morris (PM) to outperform from neutral based on a better international outlook.
• JPMorgan upgraded ev3 Inc. (EVVV) to overweight from neutral. The firm sees upside potential to ev3's consensus estimates for 2010 and raised its target price on shares to $19 from $15.
• Vale (VALE) was upgraded to overweight from equal weight at Barclays.
• Xilinx (XLNX) was raised to outperform from sector perform at RBC Capital.
• Shuffle Master (SHFL) was upgraded at KeyBanc to buy from hold.

As soon as Verizon Wireless (VZ) cut prices on its wireless calling plans last week, smaller competitor AT&T (T) did the same. Or, should we say, Verizon and AT&T simply rearranged pricing plans to grab psychological mind share more than anything.

As voice becomes something used less every year (while data use skyrockets), charging less for voice calls and more for data features is simply moving things around. Looks better for the customer, but makes little to any difference in revenue for the wireless carrier.