Analyst upgrades:

• Citigroup upgraded Cooper Industries (NYSE: CBE) to Buy from Hold on valuation as it believes commercial construction concerns are well known. The firm raised its target on shares to $40 from $37, and coupled the upgrade with a downgrade of Rockwell Automation (NYSE: ROK) to Sell from Hold.
• Credit Suisse upgraded BJ Services (NYSE: BJS) to Neutral from Underperform following its acquisition by Baker Hughes (NYSE: BHI). The firm raised its target to $17.
• Credit Suisse also upgraded Amkor Technology (NASDAQ: AMKR) to Outperform from Neutral and raised its target to $8 from $7. The firm expects Amkor to benefit from near-term strength in the supply chain and the mix shift towards higher value packaging.
• Textron (NYSE: TXT) was upgraded to Conviction Buy from Neutral at Goldman.
• Siemens (NYSE: SI) was upgraded to Neutral from Sell at UBS.
• Stanley Works (NYSE: SWK) was upgraded to Buy from Neutral at Janney Montgomery.

Last week offered mixed messages about whether an economic recovery is indeed underway. The unemployment figures were not as bad as feared, but July sales numbers were nothing to write home about, despite the wild popularity of the so-called cash-for-clunkers program.

The question is, where has consumer confidence (and consumer spending) been? Retail is a good place to look, and as it turns out, this week several shopping mall and strip mall favorites will be reporting earnings for the most recent quarter.

As earnings season begins to wind down, some apparel retailers are scheduled to report quarterly results this week. Analysts polled by Thomson Reuters anticipate that Walmart Stores Inc. (NYSE: WMT), the 800-pound gorilla in the space, will report that it earned $0.77 per share in the first quarter, about the same as in the first quarter of last year. But JCPenney Co. (NYSE: JCP), Kohl's Corp. (NYSE: KSS), Nordstrom Inc. (NYSE: JWN), and Urban Outfitters Inc. (NASDAQ: URBN) are expected to report lower profits for the first quarter as consumers continued to hold off on spending. Macy's Inc. (NYSE: M) and Abercrombie & Fitch Co. (NYSE: ANF) are expected to have swung to a loss year over year.

Whole Foods Market Inc. (NASDAQ: WFMI) and Winn Dixie Stores Inc. (NASDAQ: WINN) are likewise expected to report declining earnings, while the Great Atlantic & Pacific Tea Co. (NYSE: GAP), parent of the A&P supermarket chain, is expected to have narrowed its net loss 68.9% to $0.28 per share.

Update Nov. 26, 2008: See all 2008 Black Friday deals.

This week, some apparel and accessory producers and retailers offer a look at how they've been doing between early summer's economic stimulus spending and the coming holiday season. While Polo Ralph Lauren Corp. (NYSE: RL) reported higher earnings last week, Coldwater Creek Inc. (NASDAQ: CWTR), Eddie Bauer Holdings Inc. (NASDAQ: EBHI), Kenneth Cole Productions Inc. (NYSE: KCP), and K-Swiss Inc. (NASDAQ: KSWS) all reported net losses as consumers pulled back on spending over the summer due to higher fuel prices and other economic worries. The expectations of analysts surveyed by Thomson Financial for such companies scheduled to report this week don't look much different; i.e., a bright spot or two among lower expectations overall.

Hip retailer Urban Outfitters Inc. (NASDAQ: URBN) is expected to post earnings 22.9% higher than a year ago, to $0.35 per share, on revenue of $475.9 million (+26.4%). The Philadelphia-based company already said that same-store sales in the quarter were 10% higher. Urban Outfitters has beat expectations in recent quarters, by 11.5% in the previous quarter, and analysts on average recommend buying URBN. Shares fell to a 52-week low of $16.61 per share on Friday, and are down 29.5% from a year ago. Other companies expected to report more modest earnings growth in the coming week include watch and accessory maker Fossil Inc. (NASDAQ: FOSL), retail giant Wal-Mart Stores Inc. (NYSE: WMT), and TJX Companies Inc. (NYSE: TJX), parent of such discount retail chains as T.J. Maxx and Marshalls. These three companies have tended to top analysts estimates in recent quarters, and Fossil and TJX ended the week near their 52-week lows.

While Los Angeles-based American Apparel Inc. (AMEX: APP) had a strong second quarter, the casual wear maker is expected to report $0.13 per share earnings for the third quarter, the same as in the year-ago period. And analysts anticipate that Kohl's Corp. (NYSE: KSS) will report that profits fell 16.4% to $0.51 per share on revenue of $3.9 billion (+1.9%). Though same-store sales for October fell 9%, the Menomonee Falls, Wis.-based company reaffirmed its third-quarter forecast. Kohl's has offered positive surprises in recent quarters, topping estimates by 5.6% in the previous quarter. The consensus recommendation remains to buy KSS. Shares have been climbing after reaching a 52-week low in late October, but are still down 32.8% from a year ago.

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

• Albany Molecular Research Inc. (NASDAQ: AMRI) topped estimates and raised its full-year guidance.
• Applied Materials Inc. (NASDAQ: AMAT) Q3 earnings and revenues tumbled but beat low expectations.
• Deere & Co. (NYSE: DE) fell short of Q3 earnings expectations due to rising materials costs.
• Estee Lauder Cos. Inc. (NYSE: EL) posted strong Q4 results that led shares to a new 52-week high.
• Fossil Inc. (NASDAQ: FOSL) posted better-than-expected Q2 earnings and lifted its full-year forecast.
• JCPenney Co. Inc. (NYSE: JCP) Q2 profit slipped but still topped analysts' expectations.
• LDK Solar Ltd. (NYSE: LDK) Q2 net income soared, easily beating analysts' estimates.
• Liz Claiborne Inc. (NYSE: LIZ) rebounded from its tumble after its disappointing Q2 report.
• MBIA Inc. (NYSE: MBI) posted strong Q2 results despite downgrades of its financial ratings.
• Newcastle Investments Corp. (NYSE: NCT) despite negative earnings, it announced a quarterly dividend.
• Nvidia Corp. (NASDAQ: NVDA) posted dismal Q2 results and announced a share buyback program.
• Sysco Corp. (NYSE: SYY) Q4 earnings topped expectaitons on demand for bulk food products.
• TJX Cos. (NYSE: TJX) strong Q2 results fell short of expectations, as did the Q3 earnings forecast.
• Wal-Mart Stores Inc. (NYSE: WMT) topped Q2 estimates due to bargain seekers and international sales.

Also, Jim Cramer warns against bearishness on the financials and also suggests that the collapse of commodities will buoy earings.

For more highlights from this week, see: Abercrombie, Macy's, Kohl's, Sirius, UBS, Wachovia and others

Upcoming quarterly reports include Lowe's (NYSE: LOW), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), Target (NYSE: TGT), La-Z-Boy (NYSE: LZB), Saks (NYSE: SKS), BJ's Wholesale (NYSE: BJ), Limited Brands (NYSE: LTD), Barnes & Noble (NYSE: BKS), Burger King (NYSE: BKC), Gap (NYSE: GPS), Heinz (NYSE: HNZ), and Intuit (NASDAQ: INTU).

Visit AOL Money & Finance for more earnings coverage.

Fossil, Inc. (NASDAQ: FOSL), the maker of watches and trendy apparel, surprised the Street this morning with stronger-than-expected second-quarter earnings. The retailer multiplied the positive momentum by boosting its full-year forecast. This double dose of good news has sent shares of Fossil more than 8% higher in early-morning trading.

For the recently concluded quarter, net income soared 71% to $25.1 million, or 36 cents per share, while net sales jumped 15% to $353.2 million. The results exceeded Fossil's own forecast, provided in May, for a profit of 29 cents per share on sales growth of 12% to 14%. Analysts had even more modest expectations, with the consensus calling for a profit of 25 cents per share on $346.9 million in revenue.

Digging deeper into the second-quarter figures, gross margin rose from 49.1% to 53.9%, thanks to cost-cutting initiatives and inventory management. Same-store sales climbed 5.7%, while direct-to-consumer sales surged 25%. Domestic watch sales grew by 2.3%, and international wholesale sales rose 20% (or 9.5%, excluding currency fluctuations).

Even with the stimulus checks, retail sales numbers for June and July have been nothing to cheer about. And this coming week should provide another look at how things have been shaping up in the apparel and accessories arena. A number of companies are scheduled to release quarterly numbers, from upscale retailer Nordstrom to the parent of discounter TJ Maxx, from hipster Urban Outfitters to global giant Wal-Mart. Here's a look at what Wall Street is anticipating.

Analysts surveyed by Thomson Financial expect the following to report strong earnings growth when compared to the same period of the previous year.

• Urban Outfitters Inc. (NASDAQ: URBN): $0.30 EPS (+36.7%) on revenue of $448.5 million (+28.7%)
• Estée Lauder Cos. Inc. (NYSE: EL): $0.56 EPS (+19.6%) on revenue of $1.9 billion (+9.4%)
• TJX Cos. Inc. (NYSE: TJX): $0.46 EPS (+17.4%) on revenue of $4.6 billion (+6.8%)
• Fossil Inc. (NASDAQ: FOSL): $0.25 EPS (+16%) on revenue of $346.8 million (+13.2%)
• Wal-Mart Stores Inc. (NYSE: WMT): $0.84 EPS (+14.3%) on revenue of $101.7 billion (+9.3%)
• Elizabeth Arden Inc. (NASDAQ: RDEN): $0.22 EPS (+9.1%) on revenue of $237.6 million (-2.1/%)
• Abercrombie & Fitch Co. (NYSE: ANF): $0.93 EPS (+5.4%) on revenue of $872 million (+8.4%)

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

• AnnTaylor Stores Corp. (NYSE: ANN) sees Q1 profits beating estimates but reaffirmed the full-year outlook.
• Blockbuster Inc. (NYSE: BBI) beat Q1 earnings expectations but fell short of revenue estimates.
• Electronic Arts Inc. (NASDAQ: ERTS) posted strong Q4 and full-year results on titles such as Rock Band.
• Fossil Inc. (NASDAQ: FOSL) forecast Q1 earnings just a penny below analysts' estimates.
• IMAX Corp. (NASDAQ: IMAX) doubled its Q1 loss and missed Wall Street's expectations.
• JC Penney Co. Inc. (NYSE: JCP) profits fell 50%, and it predicted trouble would continue through the year.
• Kohl's Corp. (NYSE: KSS) posted a smaller-than-estimated Q1 profit decline and cut its full-year outlook.
• Liz Claiborne Inc. (NYSE: LIZ) swung to a Q1 loss on restructuring but beat analysts' expectations.
• Lumber Liquidators Inc. (NYSE: LL) posted strong Q1 results despite the housing slump.
• Macy's (NYSE: M) beat low Q1 expectations despite weak same-store sales.
• Nissan Motor Corp. (NASDAQ: NSANY) Q4 profit surged but it warned of lower profits this year.
• Nordstrom Inc. (NYSE: JWN) posted smaller-than-estimated Q1 profit decline and cut its full-year outlook.
• Priceline.com Inc. (NASDAQ: PCLN) beat Q1 expectations due to increased bookings.
• Sirius Satellite Radio Inc. (NASDAQ: SIRI) posted a narrower Q1 loss in line with expectations.
• Sony Corp. (NYSE: SNE) swung to a Q4 profit but fell short of Wall Street estimates.
• Sprint Nextel Corp. (NYSE: S) beat low Q1 estimates as its loss widened on charges and lost subscribers.
• Tiffany & Co. (NYSE: TIF) projected beating Q1 earnings forecasts and raised its dividend.
• Wal-Mart Stores Inc. (NYSE: WMT) posted Q1 profits up on international growth and bargain shoppers.
• Whole Foods Market Inc. (NASDAQ: WFMI) Q2 profits fell due to the Wild Oats acquistion.
• XM Satellite Radio (NASDAQ: XMSR) reported a bigger-than-expected Q1 loss and a surge in subscribers.

Fossil Inc. (NASDAQ: FOSL) shares are falling today after the company forecast a second-quarter adjusted profit of 29 cents per share, just below analysts' estimates of 30 cents per share. FOSL also forecast sales between $341.1 and $347.5 million, missing analysts' estimates of $352.4 million. 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 FOSL.

After hitting a one-year low of $24.81 in August, the stock hit a one-year high of $46.25 in December. This morning, FOSL opened at $34.46. So far today the stock has hit a low of $33.33 and a high of $35.65. As of 1:15, FOSL is trading at $33.98, down $3.27 (-8.8%). The chart for FOSL looks bullish and deteriorating slightly, while S&P gives the stock a bullish 4 Stars (out of 5) Buy rating.

For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $45 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 a 6.4% return in four and a half months as long as FOSL is below $45 at September expiration. Fossil would have to rise by more than 33% before we would start to lose money. Learn more about this type of trade here.

MAJOR PAPERS:

• Although Delta Air Lines Inc (NYSE: DAL) would like to merge with either UAL Corporation's (NASDAQ: UAUA) United Airlines or Northwest Airlines Corporation (NYSE: NWA), the company is close to Air France-KLM (NYSE: AKH), and together the two may be able to better shape a deal, the Wall Street Journal's "Heard on the Street" reported.
• The Wall Street Journal also reported that recent acquisitions by Sun Microsystems Inc (NASDAQ: JAVA) and Oracle Corporation (NASDAQ: ORCL) have suggested factors like a slowing economy could kick the high-tech deals into a "higher gear".
• Following a risk/reward reassessment, UBS AG (NYSE: UBS) decided to wind down its Switzerland-based private banking business for rich U.S. clients; the decision was announced internally in late December, but confirmed publicly this week, the Financial Times reported.

OTHER PAPERS:

• According to the Economic Times, after the dissolution of a proposed joint venture with Rajesh Exports, Fossil Incorporated (NASDAQ: FOSL), the U.S. fashion accessories giant, is set to enter India on its own.

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

• Agilent Technologies Inc. (NYSE: A) beat expectations in both earnings and revenues.
• Bob Evans Farms Inc. (NASDAQ: BOBE) beat estimates despite rising labor and commodities costs.
• Cimatron Ltd. (NASDAQ: CIMT) reported record revenues and improved profits.
• FedEx Corp. (NYSE: FDX) cut its outlook, leading the share price to a 52-week low.
• Fossil Inc. (NASDAQ: FOSL) had a strong quarter due to international sales and cost cutting.
• Home Depot Inc. (NYSE: HD) profits declined due to the housing slowdown.
• JCPenney Co. (NYSE: JCP) beat low expectations despite it first profit decline in three quarters.
• PepsiCo Inc. (NYSE: PEP), reaffirmed its full-year forecast after the recent restructuring announcement.
• Sotheby's (NYSE: BID) narrowed its losses, due largely to higher auction and private sale commissions.
• Starbucks Corp. (NASDAQ: SBUX) met expectations but lowered its guidance.
• Tandy Brands Accessories Inc. (NASDAQ: TBAC) posted losses due to overreliance on a single customer.
• TJX Cos. (NYSE: TJX) fell short of expectations but offered sunny full-year guidance.
• Tyco International Ltd. (NYSE: TYC) beat expectations and offered "cautiously optimistic" outlook.
• Wal-Mart Stores Inc. (NYSE: WMT) beat estimates on improved U.S. performance and international growth.

Jim Cramer offers three tests for financial stocks. Zac Bissonnette examines the relationship between earnings and the number of press releases generated by a company.

Upcoming results to watch for include: Hewlett-Packard Co. (NYSE: HPQ), Target Corp. (NYSE: TGT), Whole Foods Market (NASDAQ: WFMI), Abercrombie & Fitch Co. (NYSE: ANF), Gap Inc. (NYSE: GPS), and Deere & Co. (NYSE: DE).

Visit AOL Money & Finance for more earnings coverage.

When it comes to fashion, some firms just seem to have a knack for running with the trendy leaders. One of them is a Richardson, Texas outfit that makes so many different popular accessories that it's sometimes difficult to remember that the company's main product is watches.

Fossil (NASDAQ: FOSL) designs, markets and distributes fashion watches and accessories. Brands include its own Fossil and Relic timepieces, plus private-label watches for Walt Disney (NYSE: DIS) and Wal-Mart (NYSE: WMT). The company also produces watches for name fashion designers and distributes such trendy fashion accessories as leather goods, sunglasses, and a line of apparel. Its products are sold through department stores, specialty shops, the Internet and through more than 200 company stores.

The firm had good news for investors earlier in the week, when it announced Q3 EPS of 46 cents and revenues of $358.6 million. Analysts had been expecting 34 cents and $343.2 million. Management also guided Q4 EPS to 67 cents (67 cent consensus), predicted FY07 EPS of $1.79 ($1.58 consensus) and announced a two million share repurchase program. The CFO expressed confidence in the company's globally diversified business model. More than half of Fossil's sales are generated outside the United States. The stock popped through 30-day and 50-day moving average resistance on the news and has since passed into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the shares with three "strong buys," one "buy" and two "holds." Analysts see a 24% growth rate through the next year. The FOSL PEG ratio (1.43), Sales Growth rate (19.65%) and EPS Growth rate (48.39%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 73% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $20.59 and $42.17. A stop-loss of $35.65 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

When it comes to fashion, some firms just seem to have a knack for running with the trendy leaders. One of them is a Richardson, Texas outfit that makes so many different popular accessories that it's sometimes difficult to remember that the company's main product is watches.

Fossil (NASDAQ: FOSL) designs, markets and distributes fashion watches and accessories. Brands include its own Fossil and Relic timepieces, plus private-label watches for Walt Disney (NYSE: DIS) and Wal-Mart (NYSE: WMT). The company also produces watches for name fashion designers and distributes such fashion accessories as leather goods, sunglasses, and a line of apparel. Its products are sold through department stores, specialty shops, the Internet and through more than 200 company stores.

The firm had good news for investors last week, when it announced Q2 EPS of 26 cents and revenues of $306.5 million. Analysts had been expecting 19 cents and $294.8 million. The CFO attributed the solid results to inventory control and reduced operating expenses. He also cited new accessory businesses in guiding FY07 EPS to $1.72 ($1.48 consensus). Piper Jaffray subsequently upgraded the shares to "outperform".

MOST NOTEWORTHY: JDSU (JDSU), MasterCard (MA), GlobalSanta Fe (GSF), Molson Coors (TAP) and TRW Inc (TRW) were today's notable upgrades:

• BMO Capital upgraded JDSU (NASDAQ: JDSU) to Market Perform from Underperform based on valuation and good industry fundamentals.

• AG Edwards considers MasterCard (NYSE: MA) a defensive payments play, upgraded shares to Buy from Hold, and would use weakness to build positions in the stock.

• GlobalSanta Fe (NYSE: GSF) was upgraded at Bernstein to Market Perform from Underperform based on the merger with Transocean (RIG).

• Molson Coors (NYSE: TAP) was upgraded to Buy from Neutral at Goldman based on valuation and potential increased free cash flow in 2008.

• TRW Inc (NYSE: TRW) was upgraded to Buy from Sell at Goldman...

OTHER UPGRADES:

• Thomas Weisel raised Network Appliance (NASDAQ: NTAP) to Overweight from Market Weight.

• Suntrust upgraded Goodrich Petroleum (NYSE: GDP) to Neutral from Reduce.

• Fossil (NASDAQ: FOSL) was upgraded to Outperform from Market Perform at Piper Jaffray.

• Keybanc raised Macy's (NYSE: M) rating to Buy from Hold.

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