San Jose-based SunPower Corporation (NASDAQ: SPWRA) is scheduled to report its first-quarter earnings after the market closes this Thursday, April 23. Thomson First Call notes that analysts, on average, are expecting the solar issue to report a profit of 25 cents per share, down from 39 cents per share in the same quarter of 2008.

SPWRA has has an impressive history in the earnings spotlight, having exceeded the Street's profit expectations in each of the previous four reporting periods. Judging by option activity in recent weeks, some investors are betting on the stock to exceed earnings estimates yet again.

If you've ever wanted to own a mutual fund or exchange traded fund that invested primarily in companies which do a significant amount of business with the world's largest retailer, your day has come.

A new investment company named FocusShares is developing funds based on indexes created by International Securities Exchange Holdings, Inc. (NYSE: ISE). One of the new ETFs, called the FocusShares ISE-REVERE Wal-Mart (NYSE: WSI), tracks companies that get a large amount of their business from Wal-Mart Stores, Inc. (NYSE: WMT), the world's largest retailer.

The new fund includes over 30 well-known names as Del Monte Foods (NYSE: DLM) DLM, Kellogg Co. (NYSE: K) and Mattel, Inc. (NYSE: MAT). It also contains many firms that are significant Wal-Mart suppliers even though they aren't huge blue chips.

Want some numbers? Here you go: Del-Monte gets 31% of its business from Wal-Mart, Kellogg gets 18% and Mattel almost 20%. That's putting some awfully large eggs in one basket, but you can own them now for a lowly 0.35% to 0.6% in fees if you'd like. The fund opened November 30 for trading.

Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.

Bernie Schaeffer, editor of Schaeffers Investment Research, chose International Securities Exchange (NYSE: ISE) as his top pick for 2007. The stock has risen 40% on news that Deutsche Boerse AG plans to acquire the firm. For those who own the stock, Schaeffer recommends selling.

For his new favorite idea, the advisor turns to electronics retailer RadioShack Corp. (NYSE: RSH). He explains, "The stock has been flying high in 2007, doubling in value in less than six months and moving to a two-year high. Throughout this impressive rally, the stock has enjoyed the reliable support of its 10-day and 20-day moving averages.

"RSH shares have also benefited from their 10-week moving average, which neatly guided the equity higher following a late-April pullback in the shares.

"This performance has clearly dwarfed the accomplishments of the broader retail sector. RadioShack's weekly relative-strength measure, as compared to the AMEX Retail HOLDRs Trust, has been on the rise since January and is now at a 26-month high.

"The company has been impressive in the earnings confessional as well. RadioShack's first-quarter earnings, reported in late April, hit 31 cents per share, well above year-ago results of 6 cents per share and easily better than analysts' consensus view of 14 cents per share.

Across the globe, stock exchanges are scrambling to bulk up their operations. This means shelling out billions and billions for acquisitions.

The latest deal: Deutsche Boerse AG wants to pay $2.8 billion for the International Securities Exchange Holdings, Inc. (NYSE: ISE).

The ISE holds the second largest options market in the U.S. What's more, it has a very sophisticated electronic platform, which, no doubt, is a critical asset. Also, the options business is high margin.

As for Deutsche Boerse, it has the Frankfurt stock exchange and a nice business in derivatives.

All in all, it's a pretty good fit and should help blunt the competition from Nasdaq and the NYSE Euronext, Inc. (NYSE: NYX).

The bid is at $67.50, a juicy premium of over 40% -- some return in a single day.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Alltel (NYSE: AT) volatility is Elevated as arbitrageurs wait for strategic alternatives.

• AT, a customer focused communications company with operations in 36 states, has a market cap of $21 billion with long term debt of $2.7 billion.
  
• AT is reviewing its strategic alternatives. Robert Baird says: "We believe that in an acquisition scenario that AT could fetch closer to $70 per share. However, aside from M&A potential, we believe the shares are currently trading near fair value."
  
• AT May option implied volatility of 28 is above its 26-week average of 22 according to Track Data, suggesting larger near-term price risks.

International Securities Exchange (NYSE: ISE) volatility collapses. The company is in advanced talks.

• ISE is recently up $19.08 to $64.81.
  
• The Deutsche Boerse confirmed it is in talks to buy ISE. The ISE confirmed it is in advanced talks to sell itself.
  
• ISE May at the money option implied volatility of 18 is below a level of 34 from last week and below its 26-week average of 41 according to Track Data, suggesting decreasing risk.

Option volume leaders today are: Apple Inc. (NASDAQ: AAPL), Amazon (NASDAQ: AMZN) and Dendreon (NASDAQ: DNDN).

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

MAJOR PAPERS:

• The Wall Street Journal reported that Telefonica SA ADS of Spain (NYSE: TEF), in a $5.6B deal, has won a stake in Telecom Italia (NYSE: TI), but not control.
• According to the Wall Street Journal, Jones Apparel Group Inc (NYSE: JNY) CEO Peter Boneparth may sell Barney's, which it purchased in 2004 for $400M and today may be worth $800M.
• The Wall Street Journal reported that Marathon Oil Corporation (NYSE: MRO) is constructing a $3.2B addition to its biggest refinery in Louisiana for diesel fuel.
• The Wall Street Journal reported that Deutsche Boerse is in talks to make a $2.6B offer for International Securities Exchange Holdings Inc (NYSE: ISE).
• Senior Citigroup Inc (NYSE: C) executives are afraid the company could become a target of activist hedge funds seeking to break the company up, reported the Financial Times.
• According to the Financial Times, a number of companies involved in options backdating scandals, including McAfee Incorporated (NYSE: MFE) and Novell Inc (NASDAQ: NOVL), could be vulnerable to takeover by activist investors.

OTHER PAPERS:

• The New York Times "Dealbook" reported that Porsche has bid $48.9B for Volkswagen AG (OTC: VLKAY), and the bid will run for four weeks starting today.
• The News Journal reported that AstraZeneca (NYSE: AZN) has received a subpoena from the Delaware Attorney General, which seeks documents about the company's contracts with Delaware hospitals.

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

International Securities Exchange Holdings, Inc. (NYSE: ISE) is the top speculative play for 2007 from Bernie Schaeffer, technical trading expert and editor of The Option Advisor. He explains, "ISE is an electronic exchange and the world's largest trading venue for equity options (in terms of volume traded).

"About two years ago, the ISE set a precedent when it became the first U.S. options exchange to debut for public trading. ISE has appeared in the earnings confessional seven times since its trading debut in early 2005. On all of those occasions, the firm has either matched or exceeded Wall Street's earnings expectations.

"Since it appeared on the scene, the stock's path of least resistance has pointed higher, although options players remain wedded to the bearish camp. If the stock continues to advance upon new-high territory, a short-covering situation could be in the offing, eliciting an additional source of buying power.

"Analysts are also skeptical; the most recent Zacks information finds that 10 of the 11 brokerages following the stock have named it a 'hold,' leaving one 'strong sell' rating and nary a 'buy' to be found. The skepticism is palpable on this one, making it a solid contrarian play as 2007 kicks off."

To see Bernie's top conservative investment idea for 2007, click here.