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

• Aflac Inc. (NYSE: AFL) reported strong Q3 results, declared a dividend, and offered guidance for Q4.
• Avon Products Inc. (NYSE: AVP) Q3 earnings slumped and revenue was hurt by currency translations.
• BP (NYSE: BP) shares leaped higher after it reported better-than-expected quarterly earnings.
• Daimler AG (NYSE: DAI) reported that it returned to profitability in Q3 but warned of decreasing revenue.
• General Dynamics Corp. (NYSE: GD) Q3 earnings beat expectations and it lifted its earnings outlook.
• Hershey Co. (NYSE: HSY) posted strong Q3 earnings and expects full-year earnings ahead of forecasts.

Scholastic (NASDAQ: SCHL), the publisher of the Harry Potter books, issued its first-quarter numbers on Thursday. Although things do seem to be improving, I can't say I was wholly enchanted by the data.

Net sales from continuing operations rose 14%. Okay, that's a good start. Double-digit rises are always respectable. But then we get to the bottom line. Scholastic, which is a related business to McGraw-Hill (NYSE: MHP), lost 68 cents per share from continuing operations. Now, sure, the loss was considerably less severe than the year-ago black ink of $1.13 per share. But I always get nervous when I read about losses. Can't help it.

A subscription to BusinessWeek will cost you $46 for $46 issues -- an 80% savings off the newsstand price!

Or you could just buy the company and have done with it. McGraw-Hill (NYSE: MHP) is exploring a sale of the beleaguered icon, but the magazine's huge operating losses could mean it will fetch just $1, according to some experts.

The reason? With annual losses estimated at anywhere from $10 million to $75 million, acquiring the business would cost huge sums of money for at least a few years -- even if a miraculous turnaround can be engineered. Time Inc., Forbes and Conde Nast are reportedly not seen as suitors.

Investor and trader Mishko Janusevich had a mantra that he used to repeat while outlining the top, new stock shorts that appeared that day, as determined by technical indicators.

He would stand next to the overhead projected stock chart at the front of the trading room and recite, "You see this stock? You see that it's dropped $8 in past two days? You think it can't drop any more? SELL THAT STOCK it's dropping more!!"

Short these shares if you can tolerate high-risk and are an experienced investor that does not remove Buy/Stop Losses:

The Wall Street Journal (subscription required) has obtained a draft version of the SEC's report on bond-rating firms and their role in the credit bubble, and some of the stuff is pretty scary.

In one e-mail, a staffer at Standard & Poor's, which is own by McGraw-Hill (NYSE: MHP) told another that "we rate every deal," and that "it could be structured by cows and we would rate it."

Another wrote that "rating agencies continue to create" an "even bigger monster -- the CDO market. Let's hope we are all wealthy and retired by the time this house of cards falters. ;O)"

Yes -- complete with the smiley face. If this seems reminiscent of disgraced analyst Henry Blodget's e-mails bashing stocks he was publicly pumping during the dot-com bubble, that's because it's exactly the same. The lesson here, once again, is this: e-mails ever really get deleted permanently and, if you're being shady or doing something unethical, make a phone call, talk with the person in a dark alley, or send them a letter that they can promptly discard. Don't send an e-mail!

Of course, S&P's investment-grade ratings on CDOs stuffed with dodgy loans turned out to be wildly optimistic, and the house of cards has done more than falter -- it's brought down Bear Stearns and wreaked havoc on the economy.

MOST NOTEWORTHY: McGraw-Hill, Curis and Azure Dynamics were today's noteworthy initiations:

• Jefferies initiated McGraw-Hill (NYSE: MHP) with a Buy rating and $49 target. The firm believes the downturn in credit markets has already been fully priced into shares and expects the stock to gain momentum throughout 2008 in anticipation of liquidity returning to credit markets.
  
• RBC Capital initiated Curis (NASDAQ: CRIS) with an Outperform rating and $2.50 target based on the company's partnership with Genentech (NYSE: DNA) and potential upside from its pipeline.
  
• Merriman started Azure Dynamics (OTC: AZDDF) with a Buy rating. The firm believes the company's focus is where customers see the most benefit from a medium-duty hybrid or market-appropriate solutions and finds the stock attractively valued.

OTHER INITIATIONS:

• Dr. Pepper Snapple (NYSE: DPS) was assumed with a Market Perform rating at Wachovia.
  
• Morgan Stanley started Chiquita Brands (NYSE: CQB) with an Equal Weight rating.
  
• Credit Suisse initiated Iron Mountain (NYSE: IRM) with a Neutral rating and $34 target.

McGraw-Hill Companies' (NYSE: MHP) BusinessWeek, suffering under the same surfeit of advertising bedeviling the rest of the magazine industry, is going in for an extreme makeover, according to Leon Lazaroff of Bloomberg. Look for more feature articles and less lifestyle coverage. Cosmetic changes will include typography, logo and graphics. Weight is not an issue, as it's already Kate Moss-thin.

The move comes in response to a 20% decline in ad sales in the first half of 2007, compared to the same duration in 2006. In contrast, the affiliated web site, BusinessWeek.com, continues to expand its ad revenue. The magazine slots in MHP's information & Media sector, which brought in $223.1 million in revenue in the second quarter of this year, with $14.7 million in operating profit for a margin of 5.9%.

McGraw-Hill will announce its third-quarter earnings next Thursday, which would be an excellent time for it to roll out the vamped-up version of BusinessWeek.

McGraw-Hill (NYSE: MHP) has fired the head of its credit ratings agency unit, Standard & Poor's. Kathleen Corbet was let go yesterday, replaced by MHP executive Deven Sharma.

It may be an example of finding a convenient scapegoat. The company is probably not going to force out the parent's CEO Terry McGraw.

Outsiders would like to blame some of the subprime mess on ratings agencies like S&P. They argue that the firms should have downgraded the debt more quickly. Maybe, but it is hard to say that the tidal wave could be spotted. Predicting how many people will default from such a large pool may be very hard, if not impossible, to do.

According to The Wall Street Journal, half of McGraw-Hill's revenue comes from S&P.

It is hard to see how firing the credit ratings company's CEO accomplishes anything.

Douglas A. McIntyre is a partner at 24/7 Wall St.

One of the benefits of the mortgage meltdown is that its fallout is making us aware of parts of the financial markets that usually remain hidden from view. This comes to mind in reading a New York Times [registration required] report that a British money management firm, Cheyne Finance, may liquidate the assets backing its $10 billion Commercial Paper (CP) program.

Cheyne is a Structured Investment Vehicle (SIV) -- one of 30 in the $2.2 trillion CP market that borrow money using CP - and then invest the money in longer-term securities with slightly higher yields. The SIV. then pockets the difference, bolstering the asset management company's overall return.

The problem with Cheyne is that 25% of its CP is backed by pools of home equity loans. And in the last two weeks, McGraw Hill Companies' (NYSE: MHP) S&P downgraded Cheyne's CP by six notches. I don't know what's changed so suddenly but if your money market fund is invested in Cheyne's CP, you could have a problem.

With Asian markets taking a sympathy plunge this morning -- "Everyone is scared. It's like walking in the dark because we have yet to get the full picture of the subprime loan problems" -- do you think Fed Chair Ben Bernanke and Treasury Secretary Hank Paulson were right to say the subprime mortgage crisis is contained?

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter.

Moody's (NYSE: MCO) volatility elevated into 2Q revenues increasing 52% to $261M. MCO, a provider of credit ratings, research and analysis covering fixed income securities closed at $53.89. MCO reported 2Q EPS of 95 cents verses consensus estimates of 69 cents. MCO over all option implied volatility of 45 is above its 26-week average of 33 according to Track Data, suggesting larger fluctuations.

McGraw-Hill (NYSE: MHP) implied volatility Elevated at 34. MHP, a global information service provider, closed at $60.50. MHP's S&P division Standard & Poor's, is a provider of market intelligence, including independent credit ratings, risk evaluation and data. MHP over all option implied volatility of 34 is above its 26-week average of 22 according to Track Data, suggesting larger risk.

Amex Financial Select Sector (NYSE: XLF) call implied volatility Elevated at 38. XLF seeks to replicate the total retune of the Financial Select sector of the S&P 500 Index. XLF implied volatility is elevated on uncertain submprime mortgage risk exposure. C, BAC, AIG, JPM, WFC, WB & GS are components of the XLF. XLF August at the money option call implied volatility is at 38, puts are at 35; above its 26-week average of 17 according to Track Data, suggesting larger risk.

Macquarie Infrastructure (NYSE: MIC) volatility Elevated at 26 into 8/9 EPS. MIC, a market leader in the ownership and operation of infrastructure businesses in the US, will announce EPS on August 9th. MIC over all option implied volatility of 26 is above its 26-week average of 21 according to Track Data, suggesting larger risk.

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

McGraw-Hill Companies Inc. (NYSE: MHP) opened at $68.00. So far today the stock has hit a low of $67.39 and a high of $68.51. MHP is now trading at 68.12, up 1.76 (2.65%).

MHP has been climbing over the last six months, setting a 52-week high of 69.98 just over a week ago. An upgrade from Goldman Sachs is boosting the stock higher today on the heels of MHP's impressive earnings release yesterday morning. The technicals for MHP are bullish but have been slipping lately, and S&P does not rate this stock, since there would be a slight conflict of interest.

For a bullish hedged play on this stock, I would consider a May bull-put credit spread below the $60 range.

Brent Archer is an analyst on the move at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.