The TJX Companies (TJX), a retailer that competes with Kohl's (KSS) and Target (TGT), made its shareholders happy yesterday by announcing a dividend increase. The new quarterly payment was expanded by 25% to 15 cents per share.

Not only was that event pretty cool, but so was the price action of the stock. Shares of the company hit a new 52-week high of $44.95 during Tuesday's intraday session. At the end of regular trading activities, the stock settled to a nice $44.70. Volume was healthy, as well.

Retailers appear to have been rescued at the last minute, according to data from the International Council of Shopping Centers. Shoppers looking for deals the week before Christmas -- and making up for the day lost to stormy weather on the East Coast -- spent aggressively, sparing the retail sector a dismal 2008-like performance.

The healthy conclusion to the holiday season led to a positive change from November and made December one of only three months (including September and October) in which retail sales increased year-over-year.

This week, the world's top retailers will tell investors how the much-discussed holiday season went. Analysts expect a year-over-year gain of 1.3% for stores open at least a year, which of course uses a dismal 2008 as a benchmark.

The holiday shopping season is the last chance retailers get to pump up their financial statements before the close of their fiscal year, which usually comes at the end of January. For some retailers, up to 40% of their revenue comes in the weeks heading into Christmas.

Analyst Upgrades

• Kaufman Bros. upgraded Yahoo! (YHOO) to buy from hold after channel checks indicated display advertising is seeing continued improvement in pricing and demand. The firm finds the risk/reward profile on Yahoo! shares attractive at current levels and raised its price target on the stock to $20 from $19.
• Citigroup upgraded Edwards Lifesciences (EW) to buy from hold following the company's investor meeting as it believes new product launches will serve as catalysts in 2010. Citi raised its target on shares to $101 from $72.
• Deutsche Bank upgraded BWAY Holding (BWY) to buy from hold following the company's Q4 results and raised its target on shares to $22 from $17.
• Clearwire (CLWR) was upgraded to buy from sell at Soleil.
• Nokia (NOK) was raised to hold from sell at Societe Generale.
• NCR Corp. (NCR) was upgraded at JPMorgan to overweight from neutral.

The next month is the one that matters most to the retail sector. It will dominate the conversation when Q4 and full-year financials are reported. A strong Black Friday brought with it concerns that momentum will fade, but opportunity is not dispensed equally. Some retailers will come through the season better than others, and industry experts have already chosen their favorites.

Michael Dart, senior partner at Kurt Salmon Associates, says, "We are seeing a paradigm shift in the way consumer interprets value and what they are looking for." The winners will do more than pitch deep discounts to convince consumers to part with their hard-earned cash.

There's a chill in the air and a slight up-tick in confidence. Holiday discounts are coming a bit earlier, too. For retailers, this has been a great combination, leading to the second consecutive month in which retail sales increased.

This follows more than a year of drops. Consumers aren't going crazy, but they are loosening their wallets a little bit. Consumer spending accounts for 70% of the U.S. economy, and the coming holiday season is where the action is -- for the retail sector and, consequently, for everyone else.

Albert Gonzalez faced the music in a U.S. District Court in Boston on Friday, pleading guilty to masterminding one of the biggest cases of identity theft in history. The deal he struck with prosecutors could have him turning big rocks into little ones for up to a quarter of a century.

The Miami resident compromised the computer systems of large, high-profile retailers, including TJX (NYSE: TJX), BJ's Wholesale Club (NYSE: BJ), OfficeMax (NYSE: OMX), Barnes & Noble (NYSE: BKS) and Sports Authority. Tens of millions of credit card numbers were swiped in this scheme, leading to 19 counts of conspiracy, computer fraud, wire fraud, access device fraud and aggravated identity theft -- if there are other charges ... well, you get the point.

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.

Albert Gonzalez is calling it quits. Accused of masterminding the largest identity theft in the United States ever, he has agreed to plead guilty in U.S. District Court in Massachusetts. Separate charges filed in New Jersey, however, remain.

The 28 year-old faces 15 to 25 years in prison and will forfeit $1.65 million and a Miami condo (in addition to $1.1 million already seized). If the judge accepts the terms, this would be the longest sentence ever recorded for a hacking case.

When I wrote about The TJX Companies (NYSE: TJX) back in November of last year, I was clearly bearish. Hey, things seemed a lot tougher back then, and the frugal consumer was putting a ton of pressure on retail prices. Now, though, after checking out the company's second-quarter report, I find myself losing some of my negative thoughts about it.

According to the press release, sales increased 4% and earnings per diluted share from continuing operations expanded by 27% to come in at 61 cents. This was a penny better than market expectations, according to Earnings.com.

TJX Companies (NYSE: TJX) is scheduled to report Q4 EPS on February 25. TJX closed at $21.83. TJX February option implied volatility is at 61, March is at 56; above its 26-week average of 52, according to Track Data, suggesting larger price movement.

Kohl's (NYSE: KSS) closed at $37.93. KSS is expected to report Q4 EPS on February 26. Goldman Sachs downgraded KSS to Sell. KSS March option implied volatility of 63 is near its 26-week average, according to Track Data, suggesting non-directional price movement.

Russian business runs on different rules. News Corp.'s (NYSE: NWS) Rupert Murdoch, who has been doing business in China for years, is nervous about his Russian enterprises. This morning, the FBI announced it had rounded up a ring of data thieves, many from former Soviet Union countries. And then there's the little matter of BP-TNK, a joint venture between BP (NYSE: BP) and a Russian company, whose Russian shareholders are booting out its Western executives so they can take over the operation.

Here's what Silicon Alley insider reports Murdoch had to say about doing business in Russia: "We have great growing business there but just -- this is purely me, I'm sorry, I'm -- the more I read about investments in Russia, the less I like the feel of it. The more successful we'd be, the more vulnerable we'd be to have it stolen from us, so there we sell now."

In case you missed it, The Detroit Free Press reports that an international ring of data thieves used wardriving -- the practice of stealing data from unprotected Wi-Fi networks -- to take 40 million identities, use the information to print fake ATM cards, and steal millions of dollars. The corporate victims include customers of TJX (NYSE: TJX), Barnes & Noble (NYSE: BKS), and OfficeMax (NYSE: OMX). Five of the 11 defendants are from former Soviet Union countries -- "one is from Estonia, three are from Ukraine, and one is from Belarus."