Discover Financial Services (NYSE: DFS), a credit-card company that competes with Visa (NYSE: V), MasterCard (NYSE: MA), and American Express (NYSE: AXP), reported earnings for the second quarter. According to this news summary, Discover beat expectations by posting a loss of $0.18 per share. The market thought that the loss would be as high as $0.29 per share.

If you read the actual press release, you'll see that Discover, on a reported basis, made $0.43 per share. However, we must remember that this profit included an antitrust settlement sourced to Visa and MasterCard. So, once you get rid of that money, you come up with a loss for the quarter.

Today was one of those days where the overall market direction never felt entrenched nor felt certain. The news of ten banks getting to pay back TARP funds created mixed reactions, as the news was expected. Positive guidance from a chip leader may have kept the wheels on the cart for technology stocks. Oil also spent much of the day flirting with the $70 per barrel mark.

With the swings we are seeing from positive to negative, it is just further evidence that there is a battleground between bulls and bears forming. So far the bulls are managing to keep the high ground. Here are today's unofficial closing bell levels:

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This morning, the U.S. Federal Reserve is expected announce that some banks will be allowed to repay the money lent to them under the Troubled Asset Relief Program (TARP). Some of the banks expected to receive approval are Goldman Sachs (NYSE: GS), JPMorgan Chase (NYSE: JPM), American Express (NYSE: AXP), Morgan Stanley (NYSE: MS), State Street (NYSE: STT) and U.S. Bancorp (NYSE: USB). All of these banks have expressed interest in repaying the government.

What is interesting is that there will be yet another Czar joining the White House, a "Repayment Czar," (what is the deal with the media's fascination with Russian royalty?) or as the administration will call the position, the "Special Master for Compensation."

Well, now it seems that even the big boys have to play by the rules. What do I mean play by the rules? Apparently, if a bank wants to pay back the TARP monies, they must demonstrate that they can raise equity.

JPMorgan Chase & Co. (NYSE: JPM) and American Express Co. (NYSE: AXP) were the only two banks that did not raise equity.

So there was an exchange between regulators and Jamie Dimon, JPMorgan's chief executive, who said that he did not believe that ability to tap capital markets should have been relevant for his bank. He went on to say, "Any argument you can think of, you could assume we made with our regulators. And as you could also expect, they won.The primary reason was access to equity capital markets, and its hard for me to imagine that really applies in the JPMorgan case." So it seems that the exchange was spirited to say the least.

Meredith Whitney, bank analyst extraordinaire, reiterated what she's been saying from long before the financial crisis propelled us into the worst recession in most people's memories. Banks are overvalued, she said, and the government enabled them to have better first quarter earnings than they should.

Whitney said that "the underlying core, earnings power of these banks is negligible," and added that as consumer liquidity retracts and consumer credit contracts, "consumer spending is going to be less than people expect going forward."

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

• Alcatel-Lucent (NYSE: ALU) shares rose even though it reported a wider loss for the quarter.
• American Express Co. (NYSE: AXP) posted better-than-expected Q1 results but warned of challenges.
• Blackstone Group (NYSE: BX) reported a net loss and slumping revenues for the first quarter.
• Center Financial Corp. (NASDAQ: CLFC) was downgraded following its Q1 earnings report.
• Cisco Systems Inc. (NASDAQ: CSCO) posted lower Q3 earnings that still topped analysts estimates.

Has American Express turned the corner? Perhaps not, but an intriguing dynamic warrants a review of the company.

American Express (NYSE: AXP) just posted a strong quarterly performance (Q1) relative to extremely low expectations. Excluding the 12-cent, after-tax benefit from MasterCard (NYSE: MA) and Visa (NYSE: V), AXP earned 20 cents per share, versus analysts estimate of 12-18 cents.

Visa (NYSE: V), whose colleagues include American Express (NYSE: AXP), MasterCard (NYSE: MA), and Discover Financial Services (NYSE: DFS), reported a Q2 profit on Wednesday that was surprisingly strong. On an adjusted basis, earnings came in at 73 cents per share. Analysts were banking on only 64 cents per share, according to Reuters.

Quite frankly, I can see the disparity between Wall Street's thinking and the ultimate reality. I mean, the economy has been bad (to state the obvious), and people aren't spending as much. This means that they aren't using their credit cards like they used to. Ergo, you might expect Visa to post a lower number.

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

• American Express Co. (NYSE: AXP) Q1 profit blew away estimates, sending shares soaring.
• Apple Inc. (NASDAQ: AAPL) topped analysts expectations and offered conservative guidance.
• Boeing Co. (NYSE: BA) reported better-than-expected results but warned that if faced challenges.
• Coach Inc. (NYSE: COH) topped Q3 profit estimates and announced the start of quarterly dividends.
• Continental Airlines Inc. (NYSE: CAL) widened is net loss in Q1 but still beat low Wall Street estimates.

American Express (NYSE: AXP - option chain) shares are soaring higher today after the company reported a first-quarter profit of $361 million or 31 cents per share. AXP's adjusted profit came in at 32 cents per share, beating analysts' forecasts of 12 cents per share. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on AXP.

AXP opened this morning at $22.69. So far today the stock has hit a low of $22.05 and a high of $24.10. As of 11:25, AXP is trading at $23.74, up $2.77 (13.2%). The chart for AXP looks bearish and S&P gives AXP a negative 2 STARS (out of 5) sell ranking.

TheStreet.com's Jim Cramer is seeing signs of a coming boom, but he's still being cautious here.

If you had to define the early cycle, if you had to outline what stocks should be soaring coming out of a recession into a boom and which ones should be faltering, you would have to say the action in this market in the last month is the quintessential behavioral pattern.

What are the components of the early cycle? First, it's the homebuilders. As is typical coming out of a recession, the stocks precede the bottom of housing. That's exactly what's happening with the lowest permits and highest affordability and best mortgage rates and massive inventory. Everywhere, except on Wall Street reporting, the bottom is bursting out. When you read the lead story in the Sunday Philadelphia Inquirer, and it is all about the thousands of prospective homebuyers heading south to pick up condos and homes for half of what they were worth two years ago -- or even less -- and you know that virtually no one has broken ground in the Sunshine State in a year, you can bet that the bottom's actually behind us. This housing market has wiped out all but the most stable private builders and even the public ones are merging as we know from Pulte (NYSE: PHM) (Cramer's Take) and Centex (NYSE: CTX) (Cramer's Take). So, in the next cycle, you can see some profitability developing year over year even though the new homes don't have much margin because the foreclosed homes next door are going for a song. And don't believe this won't change the dynamic of future foreclosures. In most areas, rent is higher than the interest on mortgages, so you will find that second or third job needed to stay in your home. The incentive structure's radically different than a year ago.

Analyst upgrades:

• RBC Capital believes software stock fundamentals have bottomed and that the next several quarters should see reduced earnings risk, easier comps, stimulus spending benefits, and lower FX headwinds. The firm upgraded Microsoft (NASDAQ: MSFT), Taleo (NASDAQ: TLEO), Digital River (NASDAQ: DRIV) and Symantec (NASDAQ: SYMC) to Outperform from Sector Perform.
  
• Rodman & Renshaw upgraded Provectus (OTC: PVCT) to Outperform from Market Perform. The firm has increased conviction in the success of the company's ongoing trial of PV-10 in melanoma.
  
• Citigroup upgraded shares of American Express (NYSE: AXP) to Hold from Sell as it believes the risk/reward is balanced at current levels and that there are signs of potential credit market stabilization. The firm raised its price target on shares to $16 from $9.
• Brinker (NYSE: EAT) was upgraded to Outperform from Market Perform at Wachovia.
  
• PG&E (NYSE: PCG) was raised to Outperform from Neutral at Credit Suisse.
  
• Federal-Mogul (NASDAQ: FDML) was lifted to Conviction Buy from Buy at Goldman.

There could be an opportunity to tweak the way we pay CEOs of big public companies. I hope this doesn't sound too harsh. But when you consider that the average 2008 compensation for the 10 highest paid public company CEOs was $40.7 million, while their companies lost half, or $30 billion, worth of their stock market value -- I wonder whether some change may be in order.

The year 2008 put a big exclamation mark on, hopefully, the end of an eight-year sentence of stabbing common shareholders in the back. Of the 10 highest paid CEOs, here are the four who destroyed the most stock market value while getting well above average pay. The companies are listed in descending order of the percentage destruction in stock market value, along with the CEO's 2008 compensation and loss in stock market capitalization:

• Citigroup (NYSE: C) paid CEO Vikram Pandit $38.2 million while its stock fell 78% destroying $124 billion in stock market value
• Motorola (NYSE: MOT) CEO Sanjay Jha made $104 million while overseeing a 75% stock plunge which wiped out $27.9 billion in stock market value

Analyst upgrades:

• JMP Securities upgraded CB Richard Ellis (NYSE: CBG) to Outperform from Market Perform. The analyst believes the new Public-Private Investment Program will create liquidity, which will result in some degree of activity. Shares were also upgraded at JP Morgan to Overweight from Neutral.
  
• Thomas Weisel upgraded Linear Tech (NASDAQ: LLTC) to Overweight from Market Weight due to stabilizing business and favorable end market exposure.
  
• UBS upgraded PepsiCo (NYSE: PEP) to Buy from Neutral and raised its target to $60 from $57 due to moderating input costs, earnings and investment flexibility, improving U.S. beverage business, and leverage from its market share in food.
• Tibco (NASDAQ: TIBX) was raised to Buy from Neutral at Goldman.
  
• Philips Electronics (NYSE: PHG) was upgraded at ING Group to Buy from Hold.
  
• Hospira (NYSE: HSP) was upgraded to Outperform from Market Perform at Leerink.

Stocks were poised for a moderately higher open this morning, as investors try to continue last week's rally. This morning, investors will focus on data about inflation and the housing market.

In general, though, the mood has soured somewhat after Alcoa (NYSE: AA) slashed its dividend and gave a gloomy outlook Monday, American Express Co. (NYSE: AXP) said Monday its credit card defaults and deliquencies have risen over the past three months, and Nokia (NYSE: NOK) announced layoffs Tuesday in response to lower demand.

• At 8:30 a.m. Eastern, an hour before the opening bell, February data for housing starts and building permits are due out. According to Briefing.com, economists expect housing starts have fallen further in February, as have building permits.
• At the same time, Producer Price Index (PPI), a measure of inflation at the wholesale level, is forecast to have risen 0.4% in February. Core PPI, which excludes the volatile food and energy prices, is expected to be up 0.1%.
• The Federal Reserve also starts its two-day policy meeting today.