Hewlett Packard (NYSE: HPQ) shares opened in the red by more than 1% today, but have been regaining ground after laptop maker Compal Electronics Inc. lowered its shipment growth forecast for the second quarter to 10% from its previous estimate of 13-15%. Compal supplies laptops to HPQ, and said a shortage of batteries is responsible for the revised forecast. 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 HPQ.

After hitting a one-year high of $53.48 in November, the stock hit a one-year low of $39.99 in January. This morning, HPQ opened at $48.24. So far today the stock has hit a low of $47.54 and a high of $53.48. As of 12:15, HPQ is trading at $48.15, down $0.12 (-0.25%). The chart for HPQ 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 May bear-call credit spread above the $50 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 4.2% return in nine trading days as long as HPQ is below $50 at May expiration. HP would have to rise by more than 9% before we would start to lose money. Learn more about this type of trade here.

Once again, one of the hotter items during the holiday season will be computer products. Specifically, laptop computers will probably make the mark as one of the most popular gift items this season, right along with HDTVs and gaming consoles. Consumers continue to replace clunky desktop computer systems with portable and light laptops, and retailers are more than happy to oblige with loss-leader priced laptops to lure shoppers into stores.

Big box giants Best Buy, Inc. (NYSE: BBY), Circuit City Stores, Inc. (NYSE: CC) and Wal-Mart Stores, Inc. (NYSE: WMT) are expected to join the fray, and these retailers will most likely spill the beans today and tomorrow (Thanksgiving Day) to whet the appetites of computer bargain hunters come this Friday morning -- also known, of course, as Black Friday.

In a pleasant surprise on an otherwise gloomy day, Intel Corp. (NASDAQ: INTC) and IBM (NYSE: IBM) today reported better-than-expected third-quarter results. Even Yahoo! (NASDAQ: YHOO) managed to beat Wall Street's already low expectations.

Is tech back? I think it's too early to tell. One quarter does not make a trend, but the earnings certainly gave hopes to bulls.

Yahoo! reported net profit of $151 million, or 11 cents per share. Gross revenue rose 12% to $1.77 billion. Excluding payments to partners, revenue was $1.2 billion. The results beat Wall Street consensus estimates of 8 cents. Shares of the internet portal rose in after-hours trading. My earlier skepticism about Yahoo remains.

More good news came from Intel . Net income rose 43% to $1.86 billion, or 31 cents per share, from $1.30 billion, or 22 cents per share, a year earlier. Revenue soared 15% to $10.9 billion. These results beat consensus forecasts of 30 cents on revenue of $8.74 billion. Intel Chief Executive Paul Otelini said he expects results to improve in the fourth quarter: "We are very pleased with the results and optimistic about our business." Shares of Intel soared in after-market action.

Just when you thought the exploding lithium-ion battery problem was over, Gateway, Inc. (NYSE: GTW) has thrown its laptop into the ring.

Gateway announced yesterday that it is voluntarily recalling around 14,000 Samsung-made laptop battery packs that were sold for three months in 2003. The problem, according to Gateway, is that the lithium-ion battery packs can overheat, potentially causing a fire.

That's hot.

Over 10 million lithium-ion batteries have been recalled worldwide since 2006. The recall has hit computer companies blindly, including Sony Corp (NYSE: SNE), Dell Inc (NASDAQ: DELL), Apple Inc (NASDAQ: AAPL), Lenovo Group (OTC: LNVGY), and Toshiba Corp (OTC: TOSBF). Now Gateway.

Everyone who's interested in the Dell to Wal-Mart retail scenario wants to get a better idea of just exactly what Dell intends to do over there. We all know that Wal-Mart (NYSE: WMT) is the "Low Price Leader", so how does this play out for Dell (NASDAQ: DELL)? Being that my Dell corporate headquarters spy drones are down for repairs and my Wal-Mart corporate spy cams have been taken off line, I can only speculate on the intended direction which Dell's move is going to take. Over at Engadget the response to this move has been tepid, or leaning towards not well received.

First, let me say that at its root this Dell move is an excellent idea. By that I mean Dell has needed a direct outlet to the consumer for quite some time. Some of the tech sector analysts where aghast when they heard of this move because they had quickly assumed that Dell was changing over their entire marketing strategy to volume by low price but I assure you that's not what's happening here. Dell will still be building the lion's share of its desktop computers to customer order and shipping them direct. Wal-Mart, for the time being at least, shall only be handling a couple exclusive Dimension desktop models and I expect a select few notebook and laptop models. I predict also that as Dell earns Wal-Mart shelf space, there will be other Dell branded consumer electronics moving in there, but probably never their full desktop line.

Wal-Mart is historically demanding in their requirements for wholesale purchasing. They set the prices, the volume and the time tables. It's very much a take it or leave it world when selling to Wal-Mart. To me, it's kind of a sign of desperation that Dell has opted to go this route. I honestly thought that a Radio Shack (NYSE: RSH) scenario would play out to a much greater advantage for Dell than this Wal-Mart strategy. Is this a sign that as consumers we're expected to cheapen our expectations when thinking of Dell? I assure you that is what will happen. I'm expecting to spend about $2000 on a new PC next year. Perhaps it will be a Hewlett-Packard (NYSE: HPQ) after all.

Now, if you'll excuse me, I have to get to work on these spy drones.

Hewlett Packard Company (NYSE: HPQ) reported strong results last night, however, it appears industry headwinds could slow down growth in the second half of 2007.

• Laptop revenue grew 45%, with units up 61%
• Desktop growth was up 9%
• Ergo, the total personal computer business was up 24%

HP is growing 2.5x the market growth rate in the PC space, a sign of very good execution. Imaging and printing saw revenues up 6% and units up 11%, a deceleration in growth. Enterprise storage and services up a very respectable 8%.

HP continues to execute extraordinarily well while operating in very competitive industries. What was most promising regarding last night's call is that CEO Hurt is still highly confident that more cost savings can be found.

Entering the seasonally weak period for this sector, there is no need for investors to rush into HP's stock. "We will see what happens to unit growth and mix going forward," said Hurt during the call, suggesting he might be seeing signs of weakness in the economy. I'd wait for the weak seasonal period to end and then jump into HP's stock.

A fellow I know is preparing himself for a college education in veterinary science. Knowing that I slink around the internet tech world, he came to me looking for advice about what notebook computer he should buy. He plans to spend between $400 and $600 and he wants to get the most for his money (smart kid). He needs his machine for internet access, music downloads, heavy-duty emailing and of course for some school work.

It occurred to me that because my computer experience is limited to desktop models I might not be Andy's best source of information on the latest notebooks. So I told him that I'd present the question to our readers and deliver your input back to him. Knowing that our readers are some of the brightest minds on the internet, I have no doubt that Andy will get his best information right here on BloggingStocks.

So, the question is:

What is the best laptop computer that Andy can get for between $400 and $600 and what should he expect as far as speed, memory, peripherals and overall performance?

I haven't dug into Dell Inc. (NASDAQ: DELL) too deeply lately but I'm hearing noises that investors are beginning to get just a bit impatient with it. That's a bit odd to me considering that Dell has recorded anywhere from 13% to 17% growth for the year 2006. Dell has changed the position of Don Carty and I am yet to see exactly what it is saying in support of that choice. I don't find the placement of Carty to be a strange thing. What I do find a tiny bit curious is the recent quietness from Dell. We need for them to outline its game plan. I want some facts about where it's going and how it plans to get there. The market analysts seem to be saying that Dell needs to expand its marketing attack. What are Dell's plans?

I have long been a fan of Dell. I like the company and I like its products. I'm writing this blog piece on a Dell computer right now. I plan for my next computer to be a Dell also. When I bought this machine I got a lot more than I bargained for. Dell has replaced my modem twice. The first time it turned out that the problem was the fault of my (former) ISP. Dell helped us figure that out. The second modem the company replaced was due to a lightening strike. The fantastic part is this, neither replacement cost me a penny. Dell has gone the extra mile for me, to the point that I sometimes wonder if it made any money on this machine. The fact of the matter is this, Dell has unquestionably won my loyalty. That's one heck of a good way to do business.

This post is written as part of AOL Money & Finance's Best & Worst 2006. Vote for Michael Dell's fall from grace or see other nominees.

Dell Inc. (NASDAQ:DELL) has had a rocky year. And when Dell has a bad year, you can be sure Michael Dell, its founder, chairman and biggest shareholder, has had a rocky year as well.

Last summer Dell (the company and the man, no doubt) struggled with an embarrassing problem involving exploding laptop batteries. Ultimately, it had to recall more than 4 million laptops that contained batteries made by Sony Corporation (NASDAQ:SNE).

Aside from that expensive little gaffe -- which plagued other laptop manufacturers as well -- Dell also had to confront weak sales in the U.S. Not only does the company face an ongoing fierce price war (heard about those $99 laptops at Wal-Mart, anyone?), but arch rival Hewlett-Packard Company (NYSE:HPQ) has been coming on strong. In October, Dell lost its rank as the No. 1 U.S. PC maker to HP.

The company has also been under Securities and Exchange Commission investigation for its accounting and in mid-November had to announce an earnings delay, which pummeled the shares.

Just when we thought the Black Friday rumors were not going any further in terms of Blockbuster-ish frenzy, Circuit City Stores, Inc. (NYSE:CC) will have a reported $99 laptop computer available on Black Friday. Actually, the system will be $299 after rebates -- possibly matching an offer by competitor Best Buy (NYSE:BBY) but priced above a rumored $199 laptop from Wal-Mart Stores, Inc. (NYSE:WMT). The Circuit City laptop, however, will be just $99 after a customer signs up with Internet phone provider Vonage.

Circuit City's featured notebook will be a rather bland but functional Compaq system that features a Celeron processor from Intel rather than processors from Advanced Micro Devices, and it will also come with an optical drive that burns both DVDs and CDs -- not just CDs like the rumored Wal-Mart laptop (and that's a huge upgrade). The circuit City laptop will also come with 512MB of memory, a 15.4-inch screen and a 60GB hard drive.

Is Circuit City poised to have the "official" lowest Black Friday holiday price on a new laptop computer? The retailer currently sells the Compaq notebook for $499 as of today, and says that the computer ordinarily lists for $680. In order to get to the $299 price, Circuit City gives consumers a $280 instant rebate at the store and a coupon for a $100 mail-in rebate ($680-$380=$299). Sign up for Vonage in two weeks and get another $200 off. Where will you shop?

Well, here we go. Wal-Mart Stores, Inc. (NYSE:WMT) has started the holiday shopping season in traditional headline fashion by offering a laptop PC for $398. The Windows XP-based computer features a 15.4" widescreen LCD, a 60GB hard drive and an AMD Sempron processor with a speed of 2.0 GHz. Last year's model didn't come close to these specifications of course, as PC specs for the price seems to almost double every year. No surprise here.

Although Wal-Mart has been touting that it wants to court higher-income shoppers to higher-margin products, the chain always goes back to its strengths when holiday shopping season comes around.

Bargains, bargains and even more bargains come into play around this time of year as the world's largest retailer stands to pack as many people into its stores for loss leaders and at-cost merchandise on the good chance that more profitable shopping will be had as well on the same trip. This is basic retailing psychology at work here.

But -- hold your horses. A Wal-Mart spokesperson hinted at this nice little statement -- "We're probably going to see a $199 notebook on Black Friday ... certainly, we are going to see aggressive prices." Holy smokes -- a laptop under $200?

I wonder if it will come with Windows XP already installed at that price. One thing is for sure -- be prepared to throw elbows and knees and maybe even arms if a $199 laptop comes to Wal-Mart circulars in a little over two weeks. Black Friday may be referring to eyes that day.

Not too long ago Apple Computer, Inc. (NASDAQ: AAPL) announced a recall of Powerbook and iBook batteries. The laptops were fairly new, and the cost of replacing so many batteries had some pundits wondering if that would negatively hit Apple's stock price. The story spread throughout a number of news venues as indications of stormy waters ahead for Apple.

But the problem was with Sony-made battery packs. Apple's quality control just happened to be the first to pick up on the problem, and the first to suffer the bad news.

Now the issue is spreading throughout the laptop manufacturers. Today Lenovo announced that it was recalling 357,000 laptops batteries worldwide that posed a fire hazard to customers. These are batteries in both IBM/Lenovo Thinkpad and T series laptops sold between Feburary 2005 and September 2006.

Dell also recalled batteries at the same time as Apple did, with cost estimates for the exploding battery replacement swap being in the area of a quarter of a billion dollars. Toshiba is now also starting to exchange Sony batteries.

No doubt the greatest impact will be on Sony Corporation (NYSE: SNE) and its close relationship with these major computer manufacturers. Though Sony produces a massive product line, it will have to work hard to mend fences. And also hope that no one catches fires and sues them.

Tobias Buckell is an author, freelancer, and professional blogger.