International Business Machines (NYSE: IBM) reported Q3 results after the bell on Thursday. Net sales decreased 7% when compared to the year-ago period. Okay, that doesn't sound like a great start. Wait, though, because things are about to get better from here.

Sales actually increased 1% on a sequential basis. Net profit on a dollar basis went up 14%. Net margin improved. And on a per-share basis, net income jumped 18% to $2.40. According to our earnings preview, this was two pennies ahead of analyst projections.

Dell (NASDAQ: DELL), a PC maker that competes with Hewlett-Packard (NYSE: HPQ) and Apple (NASDAQ: APPL), received an upgrade on Monday. According to Marketwatch, an analyst at Broadpoint AmTech is bullish on the company because of the possibility that corporations will perceive a need to invest in technologies to replace older systems. The analyst thinks Dell shares are a buy.

Well, Dell's stock sure has experienced a high amount of momentum this year, no question about it. The market is clearly discounting an end to the recession. If such an event is essentially in place, then it's easy to see why investors would buy Dell. Not only will businesses put cash to work to make their operations more competitively efficient, but consumers will likewise get out there and replace the laptops/desktops/printers/whatever that they've held onto for longer than usual because the effect of declining Wall Street indexes made them fearful of any big-ticket purchases. Dell should theoretically benefit from a macro recovery, since the company's brand still resonates with the PC-buying crowd.

Hewlett-Packard (NYSE: HPQ), a technology company whose colleagues include International Business Machines (NYSE: IBM), Microsoft (NYSE: MSFT), Dell (NASDAQ: DELL) and Apple (NASDAQ: AAPL), issued its third-quarter numbers on Tuesday after the bell. Relatively speaking, the results weren't bad: top-line sales dropped 2%, and adjusted earnings per share came in at 91 cents, a penny ahead of expectations, as DailyFinance reported.

Hewlett-Packard is obviously trying to keep costs and expenses under control. In fact, the company reported its adjusted operating margin went up. And its adjusted earnings per share actually increased 6% compared to last year's performance.

Apple, Inc. (NASDAQ: AAPL), the famous name behind the iPod and other nifty tech products, and a company that competes with formidable opponents such as Microsoft Corporation (NASDAQ: MSFT) and Dell (NASDAQ: DELL), issued its Q3 numbers yesterday. Once again, Apple proves itself to be a company that an investor should have owned.

According to Tom Johansmeyer's earnings preview, Apple was supposed to deliver $8.2 billion in sales and $1.16 per share in bottom-line income. It was even thought that Apple might go beyond Wall Street's estimates and make $1.32 per share. Well, investors were pretty pleased to see over $8.3 billion in sales and $1.35 per share in income. Impressive.

It's only a stopgap measure, everyone knows. It's a temporary reprieve for XP. Just the same, netbooks are allowing XP, the operating system Microsoft tore from its loyal public last year, to make a comeback.

Last year I tried to get a new computer but was so badly abused by Vista I took it back and reformatted my old computer so I could avoid the demanding operating system.

Apple (NASDAQ: AAPL) finished trading last year at $198 a share. On the first trading day of this year, I recommended in a SmartMoney.com column that shareholders sell. In the two weeks since, the stock has fallen more than 30 points, three times the percentage drop of the broad market.

I realize the following statement makes me a bad person, because Apple is America's most beloved company right now: The stock still seems expensive.

I own an iPhone and I'm thinking about replacing my desktop and laptop with Macs. So I get the appeal. Moreover, I freely admit that no large company in is executing like Apple at the moment. The other day I killed a few minutes watching several of the "I'm a Mac" commercials on Apple's website. What kind of company gets people to go out of their way to view its ads? I needed my first iPhone replaced because the screen cracked. I couldn't say for sure whether it was my fault. Apple replaced it for free, which was nice. But they did so within a day, and provided all the packaging I needed to mail the old phone back, right down to little tape strips to close the box and a paperclip for popping open the phone's card slot. That was almost eerie.

Seagate Technology (NYSE: STX) has begun shipping the first of its hybrid hard drives for notebook computers and smaller computing devices needing high-performance storage at reasonable cost. Hard drives are inside almost every desktop and laptop PC these days, and although they have advanced technologically with processor speeds and other performance metrics, they are still the performance bottlenecks in almost every computer. Why? At the root, hard drives are still where they were decades ago -- reading and writing data from spinning magnetic platters. Many tricks have upped performance since 2001 or so, but hard drives still look to be aging for the computing needs which always require more performance year after year.

Now, for pure storage needs, like for iPods or TiVo boxes, hard drives are fine. As laptop computers replace desktops, more performance is becoming crucial to these systems. As a result, the hybrid hard drive was born. Newer units from Seagate contain 256 Megabytes of RAM (solid-state storage) to augment those spinning magnetic platters. Here's the only wrinkle: there is a cost premium to that. Will consumers accept that? Highly doubtful, and so we have a conundrum.

Seagate's newer hybrid hard drive products may make their way to higher-end laptop computers soon, and the early adopter consumer and technologically minded will pay the expected 30% premium just to get the added performance (well, hopefully added performance). After a while, volume and economics will drive that premium down to where there is none. If Seagate really wants to become the premier supplier of new-generation hybrid drives above where it already sits with existing market share, that premium needs to come down to 10% to 15% at the most. That may crimp margin a little, but competitive laurels won't ever rest when it comes to the hard drive industry.

Everyone who's interested in the Dell to Wal-Mart retail scenario wants to get a better idea of just exactly what Dell intends to do over there. We all know that Wal-Mart (NYSE: WMT) is the "Low Price Leader", so how does this play out for Dell (NASDAQ: DELL)? Being that my Dell corporate headquarters spy drones are down for repairs and my Wal-Mart corporate spy cams have been taken off line, I can only speculate on the intended direction which Dell's move is going to take. Over at Engadget the response to this move has been tepid, or leaning towards not well received.

First, let me say that at its root this Dell move is an excellent idea. By that I mean Dell has needed a direct outlet to the consumer for quite some time. Some of the tech sector analysts where aghast when they heard of this move because they had quickly assumed that Dell was changing over their entire marketing strategy to volume by low price but I assure you that's not what's happening here. Dell will still be building the lion's share of its desktop computers to customer order and shipping them direct. Wal-Mart, for the time being at least, shall only be handling a couple exclusive Dimension desktop models and I expect a select few notebook and laptop models. I predict also that as Dell earns Wal-Mart shelf space, there will be other Dell branded consumer electronics moving in there, but probably never their full desktop line.

Wal-Mart is historically demanding in their requirements for wholesale purchasing. They set the prices, the volume and the time tables. It's very much a take it or leave it world when selling to Wal-Mart. To me, it's kind of a sign of desperation that Dell has opted to go this route. I honestly thought that a Radio Shack (NYSE: RSH) scenario would play out to a much greater advantage for Dell than this Wal-Mart strategy. Is this a sign that as consumers we're expected to cheapen our expectations when thinking of Dell? I assure you that is what will happen. I'm expecting to spend about $2000 on a new PC next year. Perhaps it will be a Hewlett-Packard (NYSE: HPQ) after all.

Now, if you'll excuse me, I have to get to work on these spy drones.

Hewlett Packard Company (NYSE: HPQ) reported strong results last night, however, it appears industry headwinds could slow down growth in the second half of 2007.

• Laptop revenue grew 45%, with units up 61%
• Desktop growth was up 9%
• Ergo, the total personal computer business was up 24%

HP is growing 2.5x the market growth rate in the PC space, a sign of very good execution. Imaging and printing saw revenues up 6% and units up 11%, a deceleration in growth. Enterprise storage and services up a very respectable 8%.

HP continues to execute extraordinarily well while operating in very competitive industries. What was most promising regarding last night's call is that CEO Hurt is still highly confident that more cost savings can be found.

Entering the seasonally weak period for this sector, there is no need for investors to rush into HP's stock. "We will see what happens to unit growth and mix going forward," said Hurt during the call, suggesting he might be seeing signs of weakness in the economy. I'd wait for the weak seasonal period to end and then jump into HP's stock.

A fellow I know is preparing himself for a college education in veterinary science. Knowing that I slink around the internet tech world, he came to me looking for advice about what notebook computer he should buy. He plans to spend between $400 and $600 and he wants to get the most for his money (smart kid). He needs his machine for internet access, music downloads, heavy-duty emailing and of course for some school work.

It occurred to me that because my computer experience is limited to desktop models I might not be Andy's best source of information on the latest notebooks. So I told him that I'd present the question to our readers and deliver your input back to him. Knowing that our readers are some of the brightest minds on the internet, I have no doubt that Andy will get his best information right here on BloggingStocks.

So, the question is:

What is the best laptop computer that Andy can get for between $400 and $600 and what should he expect as far as speed, memory, peripherals and overall performance?

Note: The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

Volatility Index S&P 500 Options-VIX up .27 to 10.59.

New Century Financial Corp. NYSE: NEW implied volatility bid up as NEW sells off on restatement. New Century Fin'l, a real estate investment trust, providing mortgage products to borrowers nationwide, is recently down $8.72 to $21.45. New Century Fin'l announced it will have to restate operating results for the first three quarters of 2006. Merrill Lynch downgraded NEW to Sell, Jeffries lowered to Hold & Friedman Billings downgraded NEW to Underperform. NEW March option implied volatility of 69 is above its 26-week average of 42 according to Track Data, suggesting larger price risks.

H&R Block-NYSE:HRB April option implied volatility & put volume elevated on hedging. H&R Block is recently down $.30 to $24.54. Soleil said on 2/7/07 "we rate H&R Block Buy; $29 price target. We believe Block is close to entraining sale of the company (whole or in parts)." H&R Block call option volume of 2,945 contracts compares to put volume of 42,299 contracts. HRB April option implied volatility of 33 is above its 26-week average of 26 according to Track Data, suggesting larger price fluctuations.

Option volume leaders today were: Cisco-(NASDAQ-CSCO), Akamai (NASDAQ: AKAM), Bristol Meyers Squibb (NYSE: BMY) and Apple Computer (NASDAQ: AAPL).

Volatility Index S&P 500 Options were up today .37 to 10.79.

Tyco's (NYSE: TYC) option implied volatility was flat as investors digested the Tyco SEC spin-off filings. Tyco is expected to break itself up into three publicly traded company's at the end of April of 2007 (Electronics $12.7 billion in revenue, Healthcare $10 billion in revenue & Fire & Security Engineered products $18 billion in revenue). Prudential said "Investors buying Tyco shares based on sum-of-the-parts valuation may want to reconsider given that prevails expected highest multiple businesses likely to incur highest tax rates (30%+) in year 1 & 2." Tyco's overall option implied volatility of 21 is near its 26-week average, according to Track Data, suggesting non-directional price risks.

Option volume leaders today were: Yahoo (NASDAQ: YHOO), Apple Computer (NASDAQ: AAPL), Texas Instruments (NYSE: TXN), Amgen (NASDAQ: AMGN), and Google (NASDAQ: GOOG).

Note: The Daily Option Update is provided by Options Specialist Paul Foster of Theflyonthewall.com.

Stock indices were mixed in early morning trading as investors waited to see the Commerce Department's figures on personal spending and personal consumption, due out at 8:30 a.m.

The report gives an indication of inflation so will be closely watched. The key is to see if the core PCE deflator is higher than 2%. Around 10 a.m. the University of Michigan will issue its latest reading on consumer sentiment.

If both these economic numbers are tame, it will probably be a quiet trading day ahead of the three-day holiday weekend. But sometimes when trading is light, price swings on economic news can be more pronounced. CNBC's correspondent on the floor of an empty Chicago exchange says active trading will come early and then taper off during the day.

In other financial news, it looks like Treasury Secretary John Snow may step down. We'll all still be digesting the news of the Enron convictions.

Here's a look at some key Blogging Stocks:

Apple (AAPL) shares are up 2 cents in pre-market trading to $64.35 as of 8 a.m. Apple is selling its PowerSchool division to Pearson.

General Electric (GE) shares were down 1 cent to $34.41 when last traded after hours at 7:50 p.m. Australian site covers GE's nuclear energy plans.

Time Warner (TWX) shares were down 7 cents in after hours trading to $17.37 at 7 p.m. last night. TheStreet.com looks at competitor Cablevision's set-top box strategy.

Wal-Mart (WMT) shares were flat with yesterday's close at $49.45 as of 8 a.m. Washington Post writes about how some believe Wal-Mart is moving workers to part-time to avoid paying benefits.