Urban Outfitters (URBN) was downgraded this morning from hold to buy at Brean Murray Carret & Co. The brokerage attributed the downgrade to "forced incremental discounting" at the firm's Anthropologie and Urban Outiftters chains, MarketWatch reported.

In addition, URBN is facing "materially difficult" comparisons during the first half of fiscal 2012. The analyst expects the company will remain under competitive and cost increase pressures despite its varied inventory, MarketWatch added. Wall Street Strategies also lowered URBN.

Perhaps it is the cynic in me, but I was not surprised to read this story about Wal-Mart Stores Inc. (WMT) from Bloomberg. The news outlet obtained an e-mail that was sent to Walmart managers instructing them to raise prices on an average of 1,800 types of toys per store. The managers were instructed to perform the price markups "as soon as possible" and were told that the price changes were "to better enable your store and the company to have a successful financial month."

Walmart stated that these price increases went into effect because temporary discounts on products (including toys) ended on November 30. Spokesman Ravi Jariwala, spokesman for Walmart, said in an e-mail, "Once a rollback ends, the item returns to its original everyday low price." That said, Eric Johnson director of the Center for Digital Strategies at the Tuck School of Business at Dartmouth noted that "In previous years Wal-Mart has come out and hammered everyone with unbelievably low toy prices ... They stepped away from that this year and after Thanksgiving their prices have crept back up."

It seems that retailers are ready to give up on pushing the practical gifts this holiday season in hopes that weary retailers are ready to unload some cash on higher-priced items. Retailers are hoping that socks and pajamas aren't on the list but large-screen LCD TVs and other fancier gifts find their way under the tree. The hope is that shoppers will buy into mainstream optimism.

A year ago, discretionary spending (items like clothing and home furnishings) dropped to 61% of total dollars spent, hopes are that this spending will increase to 63% this year (according to estimates from Customer Growth Partners). Such an increase would equal the percentage from 2008. While two percentage points may seem small, it represents an increase of roughly $60 billion.

Thursday afternoon, Gap (GPS) reported that its third-quarter earnings increased 9% compared to a year ago.

In the most recent quarter, the retailer earned 48 cents per diluted share compared to 44 cents per diluted share a year ago. The company's net earnings dropped 1% to $303 million from $307 million a year ago. The company's net sales increased 2% to $3.65 billion, up from $3.59 billion a year ago. Furthermore, the company's operating income increased a percentage point to $504 million from $500 million a year ago.

Galactic super-retailer Walmart Stores (WMT) released its highly anticipated third-quarter earnings report this morning. The company reported a 9.3% increase in profit, thanks mainly to growth abroad. Excluding tax benefits, Walmart pulled in 90 cents per share during the quarter; matching the consensus estimate and making many investors rather happy.

Looking ahead, the retailer forecast fourth-quarter earnings between $1.29 and $1.33 per share. The lower end of this range is a penny better than the Street's expected earnings of $1.28 per share. As for the full year, the retailer now expects to earn $4.12 per share, a full seven cents better than its previous forecast.

Shares of retailer JCPenney (JCP) were lower Friday despite a strong Q3 report, as investors are focusing on the revenue miss rather than the earnings beat or its upbeat outlook.

Despite investor reaction, I have a feeling that JCP is going to enjoy some positive action in the future. Will the stock approach the $80 range from 2007? No. But I could see a solid fourth-quarter report and holiday season becoming the catalyst to a push past the $35 region and possibly near $40.

I was reading a rather interesting article in The Wall Street Journal (subscription required) about the potential for a holiday toy war between Target (TGT) and Walmart (WMT). The price war centers on toys because "parents will buy stuff for their kids even when the economy is awful."

The article adds that shoppers have attempted to buy the "biggest toy bargains" while "ignor[ing] stores' other offerings." However, the article is quick to point out improving economic conditions suggest that retailers have a reason to believe the shoppers will look around the store a bit more and be quicker to part with some cash. Is this a safe assumption? Yes, I think that it is. However, I have a couple of reservations.

Discount retailer Target Corporation (TGT) announced today that starting October 3 its stores will start to carry all six models of the popular new Apple, Inc. (AAPL) iPad.

While this is not the first time that Apple has teamed up with outside retailers, Target is the largest retailer to date that has agreed to sell the iPad.

You can already buy iPad in some Best Buy stores, and the company has announced that starting this Sunday it will be selling the device at all of its U.S. stores. In addition to facing competition from Best Buy Co., Inc. (BBY), Wal-Mart Stores, Inc. (WMT) is also rumored to begin selling iPads in stores soon.

Toys R Us announced Thursday morning that it will open 600 temporary "express" stores in malls and shopping centers around the country this holiday season, the Associated Press reported. Toys R Us is looking to capitalize on a dearth of toys stores in malls, a predicament caused when KB Toys went out of business in 2008.

"We've been very aggressive during the economic downturn, and this is another aggressive action," said CEO Jerry Storch. "During the holiday season, mall traffic ramps up, and this will allow customers to purchase fill-in toys."

According to MasterCard's SpendingPulse data, we could be in for a bit of a nasty surprise when back-to-school sales are released. Children's clothing and consumer electronics increased compared to a year ago, but nearly all other merchandise saw spending drop. Luxury goods, along with men's and women's fashions, all dropped -- suggesting that consumers were unwilling to part with their hard-earned cash on non-essentials. Spending on women's clothing saw revenue drop to $300 million, which is roughly the same as 2004 and 2005.

Not all the news was bleak: Online sales notched a 13th-straight monthly increase -- jumping 7.2%. Last August, online sales increased 1.5%. Richard Jaffe of Stifel Nicolaus noted that he is "fairly convinced we are seeing changes in consumer behavior that will be sustained for a long time." He added that shoppers must be "very convinced and excited" before purchasing anything. It really takes a great deal or a pressing need for consumers to spend money in these tight times.

Despite some early concerns that the action would be slow, seasonal hiring spiked 42% for the retail sector in 2009.

Even though growth was modest -- and based on the depressed baseline set last year -- 547,400 holiday workers showed up at stores across the country to help handle the increased foot traffic and what eventually became a small gain in sales. A year earlier, holiday hiring fell to a 22-year low of 384,300, according to an analysis revealed to BloggingStocks by Challenger, Gray & Christmas.

Retailers appear to have been rescued at the last minute, according to data from the International Council of Shopping Centers. Shoppers looking for deals the week before Christmas -- and making up for the day lost to stormy weather on the East Coast -- spent aggressively, sparing the retail sector a dismal 2008-like performance.

The healthy conclusion to the holiday season led to a positive change from November and made December one of only three months (including September and October) in which retail sales increased year-over-year.

The second best shopping day of the holiday season didn't come until after the festivities ended. Dec. 26, 2009 wasn't good enough to top Black Friday, but data from ShopperTrak shows that it did shoot past the last Saturday before Christmas, which is usually among the top days of the holiday season. This year, that Saturday wasn't able to realize its potential because of a snowstorm that smacked the East Coast.

Store traffic fell 6.6% from 2008 for the day after Christmas, but sales still reached $7.9 billion. Analysts expected the the first post-holiday shopping day to assume more importance, largely because of the storm a week earlier

This week, the world's top retailers will tell investors how the much-discussed holiday season went. Analysts expect a year-over-year gain of 1.3% for stores open at least a year, which of course uses a dismal 2008 as a benchmark.

The holiday shopping season is the last chance retailers get to pump up their financial statements before the close of their fiscal year, which usually comes at the end of January. For some retailers, up to 40% of their revenue comes in the weeks heading into Christmas.

The first estimates for the holiday shopping season have come in. MasterCard (MA) Advisors unit SpendingPulse, which tracks retail spending, puts the result at a year-over-year increase of 3.6%. This includes all form of payment and does not factor in gas and auto sales. The increase comes relative to the 2008 holiday season, which was the worst season in decades for retailers thanks to the global financial crisis.

Says Kamalesh Rao, director of economic research at SpendingPulse, "Last year the economy and consumer spending were in free fall. This year we're talking about an environment that has stabilized, that has seen a leveling off." But, that doesn't mean it's turned the corner yet. Holiday spending isn't enough to cure what ails us.