Dollar General (DG) reported earnings for the fourth quarter earlier in the week. The company, whose colleagues include Dollar Tree (DLTR) and Family Dollar Stores (FDO), saw excellent growth in its bottom line. How should we view the stock?

According to the corporate press release, adjusted profit increased 27% to 65 cents per share. The Associated Press says that expectations were set at 59 cents per share. Furthermore, same-store sales appear healthy: They expanded by 3.8%.

Analyst Upgrades

• Exxon Mobil (XOM) and BB&T (BBT) to outperform from perform at Oppenheimer.
• D.R. Horton (DHI) upgraded to outperform from market perform at Wells Fargo.
• Meritage Homes (MTH), Old Dominion Freight (ODFL) and Heartland Payment (HPY) to outperform from market perform at Wells Fargo.
• Toll Brothers (TOL) to overweight from equal weight at Barclays.
• Hershey (HSY) to buy from neutral at Janney Capital.
• UnitedHealth (UNH), Cigna (CI) and Allscripts (MDRX) to buy from hold at Deutsche Bank.
• Nationwide Health (NHP) to outperform from market perform at JMP Securities.
• Reynolds American (RAI) to buy from neutral at UBS.
• Adtran (ADTN), PG&E (PCG) and Wisconsin Energy (WEC) to overweight from equal weight at Morgan Stanley.

The country is still mired in a long recession. Many businesses are closing their doors. Others are cutting back, laying off employees and reducing production. But with every crisis there is opportunity. Such is the case for Dollar General (DG). In a time of high unemployment and low wages, consumers are counting every penny. Dollar General stores offer deep discounts, even beating discounters like Walmart (WMT).

In the most recent quarter, Dollar General's income rose by 69%. The company also raised its full-year guidance by 10% to $3.22 billion.

Analyst Upgrades

• Tyco Electronics (TEL) and Weight Watchers (WTW) to buy from neutral, and Smithfield Foods (SFD) to buy from underperform, at BofA/Merrill.
• Red Hat (RHT) to overweight from equal weight at Morgan Stanley.
• Gold Fields (GFI) to overweight from neutral at HSBC.
• Novartis (NVS) to outperform from neutral and GlaxoSmithKline (GSK) to neutral from underperform at Credit Suisse.
• Dollar General (DG) to buy from hold at ThinkEquity.
• Eagle Rock Energy (EROC) to outperform from sector perform at RBC Capital.

Recessions are a good time for discount retailers. Dollar General (DG) is a retailer of low priced goods, which are in demand during this period of high unemployment. Consumers have less to spend and gravitate to stores like Dollar General.

The Wall Street Journal (subscription required) reported that Dollar General's fiscal third-quarter profit rose to $128.1 million or 37 cents a share, up from $75 million or 24 cents a share a year earlier. Sales rose 10% to $3.22 billion and were 4.2% higher on a same-store basis. Compared to prior years, sales were up 13% and 9.2% respectively.

After a week full of mixed economic data taking its toll on the markets, things will settle down somewhat this coming week.

• Monday: Fed releases October data on consumer credit outstanding.
• Tuesday: TIPP Economic Optimism Index is due.
• Wednesday: Labor Dept. offers initial jobless claims numbers for last week, EIA's crude oil inventory last week, October wholesale trade numbers from the Census Bureau.
• Friday: Trade balance data for October, Bureau of Labor Statistics releases its Import Price Index for November, preliminary Michigan Consumer Sentiment Index is due, and the Treasury Dept. releases the federal budget balance in November.

Option traders appear to be setting up for a bullish move on Cogent Inc. (COGT). Traders plowed into 1,571 new call option contracts -- 3.27 times the average volume -- on the stock on Friday. And we know that traders were eager to get into this trade because 99% of the trades came in on the ask price.

Recently, 3M Company (MMM) announced that it was going to acquire Cogent for $10.50 per share. The stock closed Friday at $11.01, up 19.53% during the past month.

Dollar General Corp. (DG) did well during the second quarter, but the company's shares are nevertheless down this afternoon. With a little over an hour to go before the market closes for the day, the stock is off by 1%, coming in at a quote of $27.06.

The shares have traded in a range between $21.30 and $31.41 over the last twelve months. The one-year chart shows that the equity hit a rough patch after peaking in June. It's a familiar image by now.

Investors nervous about the possibly stalled economic recovery -- or worse, the beginning of the latter phase of a double-dip recession -- were not pleased with last week's housing numbers. Things were perhaps ameliorated somewhat by durable goods order numbers and a revised GDP that weren't as bad as expected, but that didn't stop the Dow from dipping below 10,000 later in the week, before fighting its way back above the benchmark to end the week, thanks largely to Fed chair Bernanke's comments on Friday.

Though the end of August is usually quiet, this week lots more economic data are due out, including more housing numbers: The Case-Shiller Home Price Index for June on Tuesday, construction spending numbers for July on Wednesday, and NAR's pending home sales for July on Thursday. There's not expected to be much to get excited about in these numbers.

Today was a quiet economic day yet stocks managed to find some footing despite two miserable selling sessions in the last two trading days. Gold hit a record close as investors continue to look for safe havens, and that is also keeping a lid on bond yields in Treasuries.

Here are today's unofficial closing bell levels:

Dow 9,939.23 +122.74 (1.25%)
S&P 500 1,062.02 +11.55 (1.10%)
Nasdaq 2,170.57 -3.33 (-0.15%)

Top Analyst Calls

Dollar General (DG), whose colleagues include Family Dollar Stores (FDO) and Dollar Tree (DLTR), is in the green during afternoon trading. With a little less than three hours to go until the market closes for the day, I see a quote of $29.56, which represents a rise of over 1% in the share price. Volume is above average.

A 1% rise isn't necessarily anything to get too excited about in a normal market, but in a bear market, it can be a badge of honor, especially when it follows an earnings report. You also have to like the fact that Dollar General's chart looks pretty good.

The Federal Reserve's next Beige Book report is scheduled to be released this week. This report is a compilation of anecdotal information on current economic conditions from each of the 12 Federal Reserve Bank districts, and it is released eight times a year. The data comes from interviews with business contacts, economists, market experts, and other sources. The June report is expected to show strengthening signs of expansion, though results could be mixed across the 12 districts.

Economic data due out this week include:

Things will be pretty quiet on the earnings front again this week as the quarter winds down. But here's a look at what analysts surveyed by Thomson Reuters are expecting from a few of the stragglers that are scheduled to report results.

In the three months that ended in February, Mosaic Co. (MOS) declared a quarterly dividend and denied that the company was for sale. Analysts expect this potash and phosphate producer to report that fiscal third-quarter earnings surged nearly 80% from the same period of last year to $0.63 per share. Revenue for the period is expected to be 31.6% higher to $1.8 billion. So far, analysts anticipate sequential and year-over-year EPS and revenue growth in the fourth quarter. However, Mosaic's earnings results have fallen short of expectations in three of the past four quarters, by as much as 11 cents per share.

Food stamps are pumping up revenue at retailers across the country. Costco (COST), Wal-Mart (WMT) and others are seeing rushes an hour before funds are credited to electronic benefits transfer cards. Wal-Mart's CFO, Tom Schoewe, has noted the trend, telling Reuters, "Once the clock strikes midnight [on the last day of the month] and EBT cards are charged, you can see our results start to tick up."

Spending via EBT is not only increasing, it generally happens quickly. JPMorgan (JPM), which runs EBT programs for more than 20 states, reports that buyers run through 85% of food stamp funds within the first three days of their availability.

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

• Advance Auto Parts Inc. (AAP) was downgraded due to concerns about its 2010 earnings outlook.
• Analogic Corp. (ALOG) received an analyst's downgrade after it reported weaker-than-expected earnings.
• AutoZone Inc. (AZO) strong Q1 results beat earnings expectations, but shares rose only a little.
• BWAY Holding Co. (BWY) received an analyst's upgrade following release of its Q4 results.
• Casey's General Stores Inc. (CASY) topped Q2 earnings estimates but lower revenue fell short.
• Ciena Corp. (CIEN) shares plummeted after it fell short of its earnings expectations for Q4.