Despite high commodity prices and challenging market conditions that put pressure on consumer spending, McDonald's Corp. (NYSE: MCD) was able to surprise Wall Street by reporting a stronger-than-expected second quarter profit. However, investors' positive reaction didn't last too long as the company announced it anticipates further high beef costs, which could lead to an increase in prices on its popular dollar menu.

Back in May, McDonald's executives announced they had no plans to make changes to its "everyday affordability" concept, but the company's chief operating officer, Ralph Alvarez, recently noticed that the dollar menu is coming under pressure from rising ingredient costs. "The cost implications of having that value menu have changed when you see what's going on in beef and chicken," Alvarez stated to the Chicago Tribune.

Alvarez didn't offer too many details on how the dollar menu might change. However, the news is not great for all you lovers of the famous double cheeseburger. A spokesman for the hamburger giant said one of the company's strategies that is already tested in some markets was to lift prices for this best-selling U.S. sandwich.

Looking ahead, McDonald's said it expects cheese cost to jump by 21% this year in the U.S., while the price it pays for chicken may see a growth in a range between 5% and 6%. For 2008 U.S. beef costs, the company also anticipates an increase between 8% and 9%.

Rising commodity prices was one of the main reasons why the research firm Deutsche Bank to lower its rating on the company to a hold earlier this morning.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.

With gasoline prices sitting at record highs, and the auto industry struggling to deal with the situation, there is a new shift in the design of cars. Historically, when you bought a smaller engine car, that engine came in a vehicle that had far less in the way of comfort and amenities... well, that is changing.

Think back a few years. You went to your local auto lot to pick up a new car, and your first choice was what size engine you wanted, the heavy duty 8-cylinder, 6, or 4-cylinder car? Suppose you decided the 8-cylinder was for you, can you picture the car that supported this engine? Typically these cars had all the bells and whistles you could imagine: the sunroof, the leather seating, fancy radios, power windows, etc. Basically, the bigger the engine, the better the "packaging" that it came along with.

Now, picture the 4-cylinder car from the past. Not much to picture here. Power windows? Doubtful. Yes, the 4-cylinder cars of the past were typically your bare bones vehicle with few fewer amenities than those coming with the 8-cylinder alternatives. If you were lucky, you would at least get some power steering in the car, but that was not always the case either.

We have all been there before, standing beside the luggage conveyor belt after a long flight, quietly praying for our luggage to magically pop out of that little window and slide our way. When our luggage finally shows up, it typically means the end of a long day that generally has the potential to stress out most travelers.

For me at least, as long as I get my luggage I am satisfied with my trip. But for a lot of us, there are several factors we use to grade the airlines, and a recent survey shows that customer dissatisfaction is running at near record level lows. These factors include anything from planes leaving and arriving on time, to the service inside the plane from fight attendants, to just how easily mishaps get handled by the agents at the ticketing desks.

Having lived in Europe the past few years, I have been no stranger to the long distance flight back and forth to the States. I suppose I have traveled roughly 100,000 miles on airlines over the past couple of years, and I have to say that for the most part I have had very pleasant experiences. My girlfriend was unfortunate enough to have lost some luggage for a week over this past Christmas, but other than that, I have been pretty lucky.

Gasoline prices have continued their charge up to $4 a gallon today, rising to a new record high of $3.418 after jumping 1.9 cents last night.

Gas prices have been rising sharply over the past few months in reaction to record high oil prices and a weak dollar, and some analysts are already predicting that we will be seeing $4 a gallon before it is all said and done. Diesel prices also rose to a new high, hitting $4.146 per gallon.

As we noted in earlier discussions, gas prices are only expected to move higher in the next few months as more drivers hit the road for their summer vacations. The heavy demand summer driving months always apply upward pressure to prices, and despite the current high prices, summer demand will definitely push prices even higher.

According to a statement from the Department of Agriculture, soybean planting is expected to increase 18% this year as higher corn costs made farmers focus on more favorable crops, such as soybeans.

The USDA expects farmers to plant 74.793 million acres with soybeans, up from 63.631 million last year. For the past year, soybeans prices saw a surge of 67% as supplies were not able to offset increased demand. The effects resulted in farmers' decision to boost soybean production. Soybeans produce their own nitrogen fertilizer, resulting in lower growing expenses.

As soybean output is expected to rise, the Department of Agriculture expects to see the amount of corn planted falling 8.1% to 86.014 million. Surging oil prices over the past months lifted ethanol demand. People focused on ethanol as a main form for alternative energy as it turns the crop into fuel, which resulted in higher corn prices.

With corn planting declining, consumers will have to take more money from their wallet when paying bills at the grocery store; food producers will compensate their costs by higher food prices. Drivers will also have to pay more as higher ethanol prices will be passed on their bills for filling cars up with the renewable fuel.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.

U.S. consumer confidence is at its lowest level since the Nixon Administration of the 1970s, according to one measure. U.S. consumer confidence fell in March 2008 to 64.5 -- a 35-year low -- the Conference Board announced Tuesday.

Economists surveyed by Bloomberg News had expected the index to drop to 73.0 in March 2008. The February 2008 index was revised to 76.4.

The board said that consumers' evaluation of present-day conditions weakened significantly. Those claiming business conditions are "bad" increased to 25.4% from 21.3%, while those claiming business conditions are "good" declined to 15.4% from 19.1%. Consumers' assessment of the job market was considerably more pessimistic than last month. Those saying jobs are "hard to get" rose to 25.1% from 23.4%, while those claiming jobs are "plentiful" decreased to 18.8% from 21.5%.

In the latest sign that the U.S. economy has hit a rough patch, the number of Americans filing for bankruptcy zoomed higher last month. According to Automated Access to Court Electronic Records, a bankruptcy and data management firm, an average of 3,960 bankruptcy petitions were filed on each day in February. That represents an 18% jump from January's numbers and 28% above February 2007.

In fact, according to The New York Times, February was the busiest month for new bankruptcy filings since Congress changed the bankruptcy laws in 2005, making the act of filing more complicated and costly. Professor Jack Williams, scholar in residence at the American Bankruptcy Institute, told the Times that "This number of bankruptcies may be under-representative of the true financial distress consumers are feeling because of the steps Congress has taken."

Have your eye on an Ionic Breeze air cleaner, a top-of-the-line massage chair, or an interactive droid? You may be out of luck if you were counting on using your Sharper Image gift card. The retailer of whimsical electronics and housewares recently filed for Chapter 11 bankruptcy protection, rendering these cards essentially useless.

Brian Riley -- senior analyst with research firm TowerGroup -- told MarketWatch that unused Sharper Image gift cards could amount to as much as $25 million. Sales clerks are telling customers the plastic cards are no longer valid for use in stores or online. A company hotline says that shoppers can inquire again in mid-March, as company officials are still trying to determine if the cards will ever be honored.

Additionally, Sharper Image rival Brookstone is offering a 25% discount for any shopper who turns in a (worthless) Sharper Image gift card when making an in-store purchase.

The truly disgruntled gift-card holders can investigate filing a petition in court, but the time and costs required would likely outweigh the gift card's value. Federal law indicates that the holder of the card may have a claim against the bankruptcy estate, but it's likely a worthless endeavor and Riley notes "There's a good chance the dollars will be lost."

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

What does the coming year hold for the economy? BloggingStocks' Peter Cohan considers five issues that will factor heavily in 2008.

Stagflation -- high inflation coupled with weak growth -- is a risk. The latest inflation statistics suggest that inflation is running at a 4.2% annual rate. That's way above the 1% to 2% range that then Fed targets. And by cutting rates, the Fed is contributing to inflation. Energy, food, metals, and other commodity prices are rising due to demand from China and India. But the Fed contributes to the price increases because oil prices are denominated in dollars. When the Fed cuts rates, the value of the dollar drops and the price of oil rises, so inflation is certainly going to rise.

The question remains whether the economy will slow down or whether the stimulus from lower rates will keep it growing. My hunch is that the key to economic growth will be the availability of credit for consumers and businesses. As long as U.S. businesses can get enough capital to keep growing and meeting demand from China and India, they will keep people employed. The weaker dollar actually helps the competitiveness of these U.S. exporters since their goods are cheaper in the international markets compared to those of European manufacturers, whose prices are denominated in more valuable euros.

And as long as people remain employed, they will be able to use their credit cards to keep buying things.

Home Depot, Inc (NYSE: HD) stock is lower this morning after a survey released yesterday found that American consumers are holding off on holiday purchases, waiting for retailers to offer deeper discounts and last-minute sales. Some shoppers surveyed revealed that they are prepared to buy fewer gifts this holiday season if retailers do not offer deep enough discounts. This has sent retail stocks that do a lot of holiday business, like HD, down this morning, as retailers are questioning if consumer spending will hold up this holiday season. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on HD.

After hitting a one-year high of $42.01 a year ago, the stock declined to a one-year low of $26.78 last month. This morning, HD opened at $29.20. So far today the stock has hit a low of $29.05 and a high of $29.62. As of 10:50, HD is trading at $$29.28, down $0.21 (-0.7%). The chart for HD looks bearish but improving slightly, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider a February bear-call credit spread above the $32.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 13.6% return in 10 weeks as long as HD is below $32.50 at February expiration. Home Depot would have to rise by more than 10% before we would start to lose money. Learn more about this type of trade here.

Consumer confidence nearly hit a two-year low as consumers had to face a slumping housing market, tighter credit conditions and higher energy prices. The RBC Cash Index showed that December confidence fell to 65.9, close to a level of 64 in November, which was the worst reading since 2005 when consumer confidence dropped under the Gulf Coast hurricanes devastations.

According to economist Ken Mayland, president of ClearView Economics, consumers are facing "a great deal of fear and foreboding." The overall economy put pressure on consumers' confidence which has deteriorated sharply over the past year. In the month of December of last year, the Index reflected a solid reading of 86.9. Its level fell during the past year, hurt by the housing market collapse, higher home foreclosures, and harder-to-get credit.

Facebook has had a breakout year -- BloggingStocks probably should have listed the social networking site among our Hot Products of 2007. It sold a small stake to Microsoft for $240 million, and its success with encouraging third-party add-ons forced News Corp (NYSE: NWS)'s MySpace and even the mighty Google (NASDAQ: GOOG) to change tactics. But as Tom Taulli and The Wall Street Journal addressed yesterday, Facebook's stock with privacy advocates is dropping over its über-creepy Beacon targeted advertising method.

On Facebook, you're as private as you are modest. You have the option of laying bare your bookshelf, Netflix (NASDAQ: NFLX) queue and purse contents for all your friends and neighbors to pan through, or you can leave all that business blank and keep your fancies as mysterious and enigmatic as you are, you unique snowflake. My profile tells users -- not to mention advertisers -- that I like to put on CNBC and dust my marriage-prohibitive record collection. Consequently, I've got E*Trade (NASDAQ: ETFC) and the occasional ironic t-shirt vendor after me, greeting me with animated ads whenever I log in.

By now, web users have learned to deal with e-tailers and ad-serving scripts tracking their behavior, realizing that oft-maligned cookies effectively just save you the effort of typing your password. This is reasonable targeted marketing: I pay nothing for a service, and in exchange, some vendor imagines it got a little closer to a selling me something.

Where Facebook and all the participating advertisers that sail with her cross the icky line is with Beacon. Beacon goes beyond serving up targeted ads -- it takes my purchase information from participating advertisers and broadcasts it endorsement-style to all my Facebook friends, as well as any others in my network who, for whatever illness or boredom, feel like probing my Facebook essence.

Given concerns about a possible slowdown in U.S. consumer spending in the quarters ahead, U.S. retailers haven't received much respect lately on Wall Street. But Target Corporation (NYSE: TGT) is one that should.

Target should post healthy 2007 same store sales growth on improving margins, aided by refinements to its electronics, apparel and home furnishings offerings, with a continued focus on value.

Further, Target's new store opening timetable remains on-schedule, with the company planning to open 100 new stores in F2008, including 30 SuperTarget stores; each should help overall revenue, although investors should keep in mind that these stores are not counted in same store sales revenue statistics. Target's shares closed Friday up 83 cents to $53.93.

In addition, Target's marketing campaign seems to be registering better with upper-middle-income shoppers, who appear to be increasingly seeking better values. The Reuters F2008/F2009 EPS consensus estimates for TGT are $3.56 to $4.06.

In the weeks ahead, BloggingStocks will take an in-depth look at the U.S. dollar's decline, its impact on the global and U.S. economies, as well as on job creation, trade, and investment.

Remonstrations about the weak U.S. dollar are getting to be a little bit like what Mark Twain said about the weather:

"Everyone seems to complain about the weather, but no one ever seems to be able to do anything about it," Twain said.

Similarly, everyone seems to complain about the weak U.S. dollar, but no one ever seems to be able to do anything about it.

This time it was former U.S. Treasury Secretary Robert Rubin, who Tuesday told Bloomberg News that relying on a falling currency to increase exports isn't a "sound approach" and said policies should be implemented to strengthen the dollar.

If you're tired of poisoning your kids with lead-painted toys from China or killing your pets with melamine-laced Chinese pet food, you may be wondering what you can buy that's made in America.

To its credit, China is trying to fix its reputation. Last week, according to CBS News, China's product safety chief Li Changjiang offered assurances that toys made in China would be "safer, better and more appealing. Before Christmas, we will certainly provide children safer, better and more appealing toys. They will certainly like them." To bolster that claim, on September 11th, China signed an agreement to prohibit the use of lead paint on toys exported to the United States.

As I posted in July, I expect that there could be a business opportunity to sell products to U.S. consumers that are made anywhere but China. Then I cited examples of an upscale New York grocery with no Chinese seafood and a New Jersey-based natural producer of premium dog food blended from meat and vegetables. However, I have not seen much in the way of new developments in the last few months.

So what are the choices for those who want to buy products made in the U.S.A.?