Rival home improvement chains Home Depot Inc. (NYSE: HD) and Lowe's Companies Inc. (NYSE: LOW) are scheduled to report quarterly results this week. Not surprisingly, given the ongoing housing slump, analysts surveyed by Thomson Financial on average expect both companies to post earnings lower than in the same period a year ago. For Home Depot, that's 61 cents per share, down 20.8%, and for Lowe's, 56 cents per share, down 16.4%. Meanwhile, cabinet maker American Woodmark Corp. (NASDAQ: AMWD), for whom Home Depot and Lowe's are major distributors, is also expected to report lower earnings: 11 cents per share, down 67.6%.

The presidential campaigns have prompted much discussion of energy policy and alternative energy sources. Some solar-energy-related concerns are scheduled to report this week, and expectations seem to be high. Trina Solar Ltd. (NYSE: TSL) is expected to report 81 cents per share earnings, up 67.9%; ReneSola Ltd. (NYSE: SOL) is expected to post earnings of 32 cents per share, up 62.5%; and Suntech Power Holdings Co. (NYSE: STP) is expected to have earnings of 32 cents per share, up 21.9%. Even China Sunergy Co. Ltd. (NASDAQ: CSUN) is expected to have swung to a profit of 3 cents per share, from a per-share loss of 14 cents a year ago.

MOST NOTEWORTHY: Micron, China Sunergy and Medtronic were today's noteworthy upgrades:

• Deutsche Bank upgraded shares of Micron (NYSE: MU) to Buy from Hold as they believe improved pricing and the company's cost reductions should drive a strong margin recovery. The firm raised MU's target to $11 from $7.
  
• Jefferies raised China Sunergy (NASDAQ: CSUN) to Hold from Underperform following the company's Q1 beat to reflect its improved outlook for the production of higher efficiency cells and better controls over cash flow measures.
  
• Goldman raised Medtronic (NYSE: MDT) to Buy from Neutral based on potential earnings upside from strong market share and broad distribution.

OTHER UPGRADES:

• UBS upgraded National Fuel Gas (NYSE: NFG) to Buy from Neutral.
  
• Arris (NASDAQ: ARRS) was raised to Outperform from Market Perform at Friedman Billings.
  
• Piper upgraded Central Garden & Pet (NASDAQ: CENT) to Buy from Neutral.

If you were paying close attention to this column last week, you would have sidestepped some of the pain and misery investors in many of the stocks discussed have suffered lately. Of late, we have seen the general direction of the markets turn positive, even in the face of news to the contrary.

Perhaps it is because investors have an appetite for stocks, since there seems to be few investment alternatives. Real estate is off limits and the yield on bonds and other fixed-income investments is pathetically low.

The theme for the week ahead is SMOOTH SAILING. In this week's column, we delve into some stocks that will be announcing earnings, and that may benefit from the changing tide of investor sentiment. To be sure, there will be several areas of choppiness as we continue to be bombarded by the stormy realities of a turbulent economy.

Monday, May 19

The chart for Campbell Soup (NYSE: CPB) looks M'm M'm good. Sporting a smooth line with nary a ripple over the past 12 months, management has done a great job at keeping both company earnings and share price up, even in the face of significant food inflation. While shares have been condensing during the past few months, recently they have been rising with a series of higher highs and higher lows. Be on the outlook for earnings of 44 cents per share on revenue expectations of $1.89 billion. Now that I think of it. That's a lot of soup wrapped in tin-plated steel -- one of many materials that has seen its price almost double in the past six months.

Suntech Power (NYSE: STP) closed at $47.12 Thursday.

STP is scheduled to report Q1 EPS on May 22.

STP June option implied volatility of 80 is above its 26-week average of 73 according to Track Data, suggesting larger price movement.

China Sunergy (NASDAQ: CSUN), a manufacturer of solar cell products in China, closed at $12.58 Thursday.

CSUN is expected to report Q1 EPS on May 20.

Cowen says: "Key issues: Ramp of new cells, expense control, liquidity."

CSUN June option implied volatility of 111 is above its 26-week average of 100 according to Track Data, suggesting larger price risk.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

MOST NOTEWORTHY: Dreamworks Animation (NYSE: DWA), BlackRock (BLK), Mariner Energy (ME) and Franklin Resources (BEN) and RightNow Technologies (RNOW) were today's noteworthy initiations:

• Stifel expects Dreamworks Animation's (NYSE: DWA) fundamental outlook for film to improve given a more accommodating home entertainment market, while next-gen DVD format adoption and the introduction of 3D exhibition in theaters creates incremental opportunities for film studios. The firm started shares off with a Buy rating.
  
• Wachovia believes BlackRock (NYSE: BLK) is one of the best-positioned managers in both product and geographic perspectives and initiated shares with an Outperform rating.
  
• BMO Capital believes Mariner Energy (NYSE: ME) has a number of catalysts that could push shares higher, but feels current trading levels are not attractive. BMO started shares with a Market Perform rating.
  
• William Blair views Franklin Resources (NYSE: BEN) as a premier global firm with an advantage in many attractive international markets and started shares with an Outperform rating.
  
• Cantor believes RightNow Tech's (NASDAQ: RNOW) transition creates significant execution risk, initiated shares with a Hold rating...

OTHER INITIATIONS:

• China Sunergy (NASDAQ: CSUN) was initiated with a Neutral rating at Cowen.
  
• Banc Of America initiated shares of The Stanley Works (NYSE: SWK) with a Neutral rating.
  
• Yamana Gold (NYSE: AUY) was started with a Buy rating and Credit Suisse.
  
• Deutsche Bank initiated Cree (NASDAQ: CREE) with a Hold rating.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Oracle Corp (ORCL), Helicos BioSciences (HLCS), Clean Energy Fuels (CLNE) and China Sunergy (CSUN) topped today's noteworthy initiations:

• Benchmark started Oracle Corp (NASDAQ: ORCL) with a Hold rating.

• JP Morgan initiated Helicos BioSciences (NASDAQ: HLCS) with a Neutral rating based on the potential of its single-molecule genetic sequencing platform but noted that commercialization carries near-term risk.

• Hambrecht believes Clean Energy Fuels' (NASDAQ: CLNE) total addressable market is over $20B given the company's focus on natural gas vehicle fuel for return-to-base applications and started shares with a Buy rating.

• Jefferies wants to see China Sunergy (NASDAQ: CSUN) demonstrate that its silicon wafer suppliers can meet aggressive ramping plans before becoming more positive on the stock, starting shares off with a Hold rating...

OTHER INITIATIONS:

• Lehman started Greenlight Capital Re (NASDAQ: GLRE) with an Equal Weight rating.

• Cellcom Israel (NYSE: CEL) and Partner Communications (NYSE: PTNR) were initiated with Buy ratings at Citigroup.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).