Jo-Ann Stores (JAS) announced that it has definitively agreed to be acquired by an affiliate of Leonard Green & Partners. The acquisition carries a total price tag of $1.6 billion, or $61 per share, which is a hefty 34% premium to Wednesday's close. The merger has been approved by JAS's board of directors after receiving a recommendation of a special committee that was made of independent directors.

JAS chairman and CEO Darrell Webb noted, "We are excited about the prospect of working with Leonard Green & Partners as we further capitalize on opportunities to accelerate the expansion and upgrade of our stores and pursue market share gains. With the help of our talented and dedicated team, we will continue to offer our customers a superior shopping experience for all of their fabric and craft needs."

Most of the S&P 500 have reported earnings results this quarter, but on tap this week are Brown-Forman Corp. (BF.B), National Semiconductor Corp. (NSM) and Pall Corp. (PLL), which are expected to post earnings growth, as well as H&R Block Inc. (HRB) and Kroger Co. (KR), which are not.

Most of the high expectations from analysts surveyed by Thomson Reuters are still with retailers this week, though. Here's a look at a few of them.

It's been reported that Canadian banks have fared better than their U.S. and European counterparts recently. The Bank of Montreal (BMO) did report strong fourth-quarter results last week. This week, analysts surveyed by Thomson Reuters expect competitor Royal Bank of Canada (RY) to post modest earnings growth as well, while Canadian Imperial Bank of Commerce (CM) and Toronto Dominion Bank (TD) are expected to post earnings declines.

Analysts are looking for $0.98 per share (+6.1%) earnings from RBC, $1.25 per share (-7.4%) from Toronto Dominion and $1.36 per share (-21.8%) from Canadian Imperial. The long-term EPS growth forecast for these three banks is for ranges from 10% and 12%, which is in the same ballpark as U.S. rivals Bank of America Corp. (BAC) and Wells Fargo & Co. (WFC). Earnings multiples for these Canadian banks are 10x to 12x, but only Toronto Dominion has a First Call consensus recommendation of buy. The Motley Fool, though, recently commented on Royal Bank's steady income and reliability. All three banks are trading near their 52-week highs, and shares of all are up well more than 100% since March lows.

• Citigroup upgraded Expedia (NASDAQ: EXPE) to Buy from Hold as they believe the company's fee elimination coupled with 2009 industry trends could lead to market share gains and that the valuation is compelling at current levels. Citigroup raised its price target to $14 from $9 on EXPE shares.
  
• Credit Suisse upgraded Lukoil (OTC: LUKOY) to Outperform from Neutral as it believes lower taxes and the ruble's decline will increase profitability.
  
• Soleil upgraded Jo Ann Stores (NYSE: JAS) to Buy from Hold as it believes the company's sales results in the first half of 2009 could top expectations. The firm raised its target price to $20 from $16.
• Johnson & Johnson (NYSE: JNJ) was upgraded to Buy from Neutral at UBS.
  
• Bayer AG (OTC: BAYRY) was lifted to Buy from Neutral at Banc of America/Merrill.
  
• ManTech (NASDAQ: MANT) was raised at Wachovia to Outperform from Market Perform.

• Jefferies upgraded shares of Red Hat (NYSE:RHT) to Buy from Hold after their checks indicated Red Hat's November quarter results will be in-line due to solid Jboss sales. The firm also believes a potential new partnership with Cisco (NASDAQ:CSCO) could provide share upside.
  
• Barclays upgraded Amazon.com (NASDAQ:AMZN) to Overweight from Equal Weight as they believe the company's competitive position will strengthen during the current downturn and that the company will gain share.
• JP Morgan upgraded YRC Worldwide (NASDAQ:YRCW) to Neutral from Underweight following the announcement that the company and the Teamsters will vote on contract modifications.
• Del Monte Foods (NYSE:DLM) was raised to Overweight from Equal Weight at Stephens.
  
• Thomson Reuters (NYSE:TRI) was upgraded at Morgan Stanley to Equal Weight from Underweight.
  
• Reliant Energy (NYSE:RRI) was lifted to Outperform from Market Perform at Wachovia.

• B. Riley downgraded shares of Hot Topic (NASDAQ:HOTT) to Neutral from Buy to reflect a lack of visibility into 2009 and valuation but raised their target price to $9.30 from $8.20.
• Citigroup cut KLA-Tencor (NASDAQ:KLAC) to Hold from Buy to reflect their more offensive stance on the semi group as they view KLA-Tencor as a more defensive name. The firm lowered their target to $22 from $31.
• KeyBanc downgraded Arch Chemicals (NYSE:ARJ) to Underweight from Hold citing global economic headwinds, the stronger dollar, pension costs, and continued weakness in North American housing, among other reasons.
  
• Jo Ann Stores (NYSE:JAS) was cut to Hold from Buy at Soleil.
• Calyon downgraded Schlumberger (NYSE:SLB) to Outperform from Buy.
• Amdocs (NYSE:DOX) was downgraded to Neutral from Buy at Goldman.

• Goldman upgraded BT Group (NYSE: BT) to Buy from Neutral on valuation and improved earnings visibility.
  
• Soleil upgraded shares of Jo Ann Stores (NYSE: JAS) to Buy from Hold following the company's Q2 upside surprise to reflect strong fundamentals and market share gains. The firm raised Jo Ann's target to $30 from $25.
  
• Amylin Pharma (NASDAQ: AMLN) was upgraded to Buy from Neutral at Merrill Lynch.
  
• Energen (NYSE: EGN) was upgraded to Buy from Neutral at UBS.

• Roth Capital downgraded shares of Warner Chilcott (NASDAQ: WCRX) to Hold from Buy pending patent clarity for the company's lead drug, Loestrin 24 for birth control. The firm lowered their target to $18 from $20.
• JP Morgan cut China Mobile (NYSE: CHL) to Underweight from Overweight as they believe increased competition may limit earnings growth.
  
• Cantor downgraded shares of Cell Genesys (NASDAQ: CEGE) to Hold from Buy following the termination of the VITAL-2 Phase III clinical trial. The firm also lowered their target to $2 from $10.
• Coca-Cola (NYSE: KO) was lowered to Neutral from Outperform at Credit Suisse.
  
• Gilead Sciences (NASDAQ: GILD) was downgraded to Equal Weight from Overweight at Lehman.
  
• Cinemark (NYSE: CNK) was downgraded at BMO Capital to Market Perform from Outperform.

The Associated Press reports that another batch of killer toys from China is being recalled. On Wednesday, toys and children's necklaces made in China were recalled, including five more items from the popular Thomas & Friends Wooden Railway product line, because they contain dangerous levels of lead.

Here are the details:

• 23,500 more necklaces, bracelets and pendants imported by TOBY N.Y.C. of New York;
• 850 children's Spinning Wheel Necklace necklaces, produced by Rhode Island Novelty of Cumberland, RI;
• 350,000 Happy Giddy Gardening Tools and Children's Sunny Patch Chairs, imported by Target Corp. (NYSE: TGT) of Minneapolis, MN;.
• 200,000 Thomas and Friends Wood Railway Toys and 800 Britain's "Knights of the Sword" series toys, distributed by RC2 Corp. (NASDAQ: RCRC) of Oak Brook, IL
• 16,000 children's toy rakes imported by Jo-Ann Stores Inc. (NYSE: JAS) of Hudson, OH.
• 10,000 Floor Puppet Theaters produced by Guidecraft Inc., of Englewood, NJ.

Gallery: More toys recalled

MOST NOTEWORTHY:

• Friedman Billings upgraded shares of Winn-Dixie Stores (NASDAQ: WINN) to Outperform from Market Perform citing valuation, sustainable Q3 margins, and share gains from both Wal-Mart Stores (WMT) and Publix.

• Sandler raised TIB Financial Corp (NASDAQ: TIBB) off the ground, to Hold from Sell, citing valuation.

• Jefferies upgraded shares of Energy East (NYSE: EAS) to Hold from Sell after Iberdrola agreed to acquire the company.

• Pacific Crest upgraded both Baidu.com (NASDAQ: BIDU) and SINA Corp (NASDAQ: SINA) to Outperform from Sector Perform following their trip to Asia, citing China's strong online ad market. They believe Baidu.com is benefiting from its sales-force integration and SINA Corp's brand strength should lead to further market-share gains...

• Lehman upgraded Celgene Corp (NASDAQ: CELG) and Genzyme Corp (NASDAQ: GENZ) to Overweight from Equal Weight.

• Matrix USA upgraded Jo-Ann Stores (NYSE: JAS) to Sell from Strong Sell.

• Dolby Laboratories (NYSE: DLB) was upgraded to Overweight from Neutral at JP Morgan.

• Wachovia raised U-Store-It Trust (NYSE: YSI) to Market Perform from Underperform.

As more people take up sewing for recreation, the fabric store is becoming an arts and crafts center. A Hudson, Ohio company has been on the cutting edge of the transformation.

Jo-Ann Stores Inc. (NYSE: JAS) is the nation's leading fabric retailer, offering a range of merchandise used in sewing, crafting and home decorating projects. Among its staple items are fabrics, notions, frames, paper crafting materials, artificial and dried flowers, home accents and finished seasonal goods. The company operates more than 940 stores, in 47 states.

Jo-Ann Stores made the news last week, on word it is the subject of serious acquisition interest. According to TheDeal.com, the firm would probably be taken private at a premium to its current share price. Bids were said to be due this month. Parties described as being involved declined comment.

As sewing has made the transition from drudgery to hobby, so has the fabric store been transformed into an arts and crafts center. A Hudson, Ohio firm has been on the cutting edge of the metamorphosis.