Diamonds are always popular around Valentine's Day, but lingering unemployment problems and consumer confidence woes have hit most jewelry stores hard. But not Blue Nile (NILE).

This online retailer of fine custom-made rings, earrings and necklaces allows consumers to browse a huge array of diamonds without paying a middle man. This allows for some great deals, making NILE your best bet to cash in on jewelry sales this Valentine's Day.

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At the time of this writing, Louis Navellier did not own shares of NILE in personal or client portfolios.

Valentine's Day may be a commercialized holiday to some, but there's no denying that its big business. And this coming Valentine's Day may be extra sweet since it falls on a Sunday, making it a great excuse for a romantic night out. In fact, total Valentine's Day spending is expected to reach $17.6 billion this year, up 3.3% over 2009, according to consumer spending researchers at IBISWorld.

That's a big payday, and one that investors should be paying attention to.

Analyst Upgrades

• Jefferies upgraded Citrix Systems (CTXS) to buy from hold and raised its target to $48 from $43, citing VMware's (VMW) strong Q4 report and survey results that indicate continued strength for Citrix.
• Citigroup upgraded Amylin Pharmaceuticals (AMLN) to buy from hold on confidence the company's LAR drug will be approved following the approval of Novo Nordisk's (NVO) Victoza. Citi raised its target price for Amylin shares to $27 from $4.
• Baird upgraded Texas Instruments (TXN) to outperform from neutral and raised its target to $30 from $28. The firm believes it is too early to take profits in Texas Instruments and notes that checks continue to indicate a continued recovery in end-demand.
• Lexmark (LXK) was upgraded to overweight from equal weight at Barclays.
• Salix (SLXP) was upgraded to outperform from perform at Oppenheimer.
• Plexus (PLXS) was lifted to outperform from neutral at Credit Suisse.

Analyst upgrades:

• Jefferies upgraded VMware (NYSE: VMW) to Hold from Underperform on expectations June quarter revenue will be inline-to-slightly-better and negative revisions to September quarter revenue will not be as great as in the most recent two quarters. The firm raised its target on shares to $25 from $20.
  
• Citigroup upgraded Blue Nile (NASDAQ: NILE) to Buy from Hold on valuation following the recent pullback and believes expectations for Q2 are reasonable. The firm has a $50 price target on the stock.
  
• FBR Capital upgraded Bronco Drilling (NASDAQ: BRNC) to Market Perform from Underperform on valuation as it believes negative sentiment will ease. The firm raised its target on shares to $4 from $3.
• Unilever (NYSE: UL) was upgraded to Overweight from Neutral at JP Morgan.
  
• Posco (NYSE: PKX) was upgraded to Overweight from Equal Weight at Morgan Stanley.
  
• Gol Linhas Aereas (NYSE: GOL) was upgraded to Buy from Underperform at BofA/Merrill.

Analyst upgrades:

• Citigroup upgraded Amazon.com (NASDAQ: AMZN) to Buy from Hold on expectations the company's top-line growth rate could be more sustainable than expected and its operating margins could recover given due to less retail discounting. The firm raised its price target on shares to $97 from $65.
  
• UBS upgraded King Pharmaceuticals (NYSE: KG) to Buy from Sell based on expectations that Sandoz will settle patent litigation regarding Skelaxin after last weeks settlement of Clarinex with Schering-Plough (SGP).
  
• Jefferies upgraded Reliance Steel (NYSE: RS) to Buy from Hold as it believes steel prices and demand are close to near-term bottoms. The firm raised its target on the stock to $44 from $25.
• Palm (NASDAQ: PALM) was raised to Buy from Neutral at Banc of America/Merrill.
  
• Nestle (OTC: NSRGY) was lifted to Neutral from Underweight at JP Morgan.
• Johnson & Johnson (NYSE: JNJ) was upgraded at Wachovia to Outperform from Market Perform.

Analyst upgrades:

• Citigroup upgraded Blue Nile (NASDAQ: NILE) shares to Buy from Hold on valuation following the recent sell-off as they believe weakening fundamentals have been factored into estimates and that Blue Nile should benefit from the recent softening of diamond prices. The firm raised its target price to $30 from $20.
  
• Baird upgraded AmSurg (NASDAQ: AMSG) to Outperform from Neutral based on valuation, potential upside from in-line results, good visibility, and FCF yield.
  
• Oppenheimer upgraded DryShips (NASDAQ: DRYS) to Perform from Underperform on valuation following the recent weakness and believes the company is at least halfway through its $500M equity offering.
• UAL Corp (NASDAQ: UAUA) was raised to Buy from Neutral at Banc of America/Merrill.
  
• Mylan (NASDAQ: MYL) was upgraded to Overweight from Equal Weight at Barclays.
  
• Exxon Mobil (NYSE: XOM) was lifted at Deutsche Bank to Buy from Hold.

As John, Paul, George, and Ringo once said, "Money can't buy me love." While true, money can buy long-stemmed roses, expensive dinners, theater tickets, and jewelry. On the flip side, this money can be tucked away for a rainy day -- the fancy floral delivery replaced with daisies from the grocery store, the pricey meal forgone for the cozy neighborhood spot (or fondue at home).

Many of us have long criticized St. Valentine's Day as a holiday conceptualized and fueled by Hallmark and American Greetings (NYSE: AM). But even more of us fall into its trap, spending a nice chunk of change in mid-February to prove our affection to our significant other.

If you thought Black Friday was just for brick-and-mortar retail, think again. The official start of the online shopping rush is the Monday after the Thanksgiving holiday (Cyber Monday is its name), but don't think that companies like Amazon (NASDAQ: AMZN) and Blue Nile (NASDAQ: NILE) are going to wait that long. They're in the game now. And they want your attention. More importantly, they want you to use the virtual shopping carts at their respective sites early and often. It's really crucial this year, because the economy stinks, and growth in spending isn't going to be great.

According to CNBC, Amazon's strategy is to use very low prices as a way of stopping competitors like eBay (NASDAQ: EBAY) dead in their electronic tracks. This Christmas season, retailers, whether online or not, may find themselves in a no-win situation. They have to lower prices to encourage people to shop. But quality growth in top-line sales is questionable. When managements see the bad news flow about the global recession, they become scared and want to become even more aggressive in terms of pricing. The strategy may work and it may not. It's a vicious circle. Don't get me wrong, the retail industry faces this problem every year at this time, but you have to agree that the current economic cycle is particularly noxious. It's times like these, however, when retailers should want to offer more than just a value proposition. They should want to offer a differentiated shopping experience, a better selection of items. They should strive to offer up a brand image that makes you want to hit their inventories first. They need to step away from trying to undercut all their competitors and instead figure out how to stock the right merchandise in the right amounts. And when it comes to a business like Amazon, I think there's great opportunity to go beyond low-pricing strategies. Quite frankly, I don't care whether Amazon has the lowest prices or not. I find it easier to do some of my holiday shopping on the site. It saves me time during this busy season, I trust the security of the platform, and I know that the supply chain is efficient and reliable. And I definitely think of Amazon first when looking to do online shopping because of its valuable brand equity.

Analyst upgrades:

• Baird expects Thor Industries (NYSE: THO) to benefit from industry consolidation and the eventual recovery. Shares were upgraded to Neutral from Underperform.
  
• Jefferies upgraded SPSS Inc. (NASDAQ: SPSS) to Buy from Hold on valuation and believes the company's cost cuts will be positive for EPS. The company's target was lowered to $28 from $29.
  
• Banc of America upgraded shares of Entergy (NYSE: ETR) to Buy from Neutral on valuation and believes the company is unlikely to spin-off Enexus by year-end. They believe a spin-off in 2009 or no spin at all suggests a higher share price from current levels. The company's target was raised to $104 from $101.50.
• AMN Healthcare (NYSE: AMN) was upgraded to hold from Sell at Citigroup.
  
• Argus upgraded Choice Hotels (NYSE: CHH) to Hold from Sell.
  
• Transdigm Group (NYSE: TDG) was lifted to Buy from Neutral at UBS.

Analyst downgrades:

MOST NOTEWORTHY: DaVita, Dr. Pepper Snapple Group and Ascent Solar were today's noteworthy initiations:

• Suntrust expects DaVita's (NYSE: DVA) dominant market share to help in commercial contract negotiations and they view potential Medicare reimbursement changes as more of an opportunity than a risk. The firm started shares with a Buy rating and $62 target.
  
• JP Morgan initiated Dr. Pepper Snapple (NYSE: DPS) with an Underweight rating and expects declining free cash flow in 2008, which they note would be the third straight year.
  
• Ascent Solar (NASDAQ: ASTI) was assumed with a Hold rating and $14 target at Jefferies. The firm sees high development risk with the company just beginning to operate its pilot line and commencing initial planning for its first 30 MW commercial line.

OTHER INITIATIONS:

• Stanford initiated ViroPharma (NASDAQ: VPHM) with a Buy rating and $13 target.
  
• Goldman assumed Research in Motion (NASDAQ: RIMM) and Qualcomm (NASDAQ: QCOM) with Buy ratings and targets of $163 and $55, respectively.
• Blue Nile (NASDAQ: NILE) was initiated at Thomas Weisel with an Underweight rating and $44 target.

Morgan Stanley downgraded China Unicom (NYSE:CHU) from "outperform" to "neutral", according to Briefing.com. The news service also reports that UBS downgraded CSX (NYSE:CSX) from "buy" to "neutral"

Abercrombie (NYSE:ANF) cut to Market Perform at FBR, according to 24/7 Wall St. The financial website also reports that Blue Nile (NASDAQ:NILE) Started as Underweight at Thomas Weisel.

Douglas A. McIntyre

MOST NOTEWORTHY: Taubman Centers, AstraZeneca and Blue Nile were today's noteworthy initiations:

• Friedman Billings believes Taubman Centers (NYSE: TCO) is very well positioned with its upscale regional malls and lifestyle centers to weather the current challenges in the current retail environment. Shares were assumed with an Outperform rating and $64 target.
  
• JP Morgan initiated AstraZeneca (NYSE: AZN) with a Neutral rating. The firm expects investor confidence in the coming months to improve as expectations are AZN's pipeline is low.
  
• Deutsche Bank finds Blue Nile (NASDAQ: NILE) fairly valued given the challenging economic environment and rising commodity prices and initiated shares with a Hold rating and $48 target.

OTHER INITIATIONS:

• Wachovia started American Water Works (NYSE: AWK) with a Market Perform rating.
  
• Heartland Payment (NYSE: HPY) was assumed with a Buy rating and $33 target at Citigroup.
  
• Goldman resumed coverage of AbitibiBowater (NYSE: ABH) with a Neutral rating.

MOST NOTEWORTHY: Nvidia, Entropic Comm and Cleveland Cliffs were today's noteworthy initiations:

• Piper initiated Nvidia (NASDAQ: NVDA) with a Neutral rating and $23 target and believes the rate at which the company gained market share over the past two years is unsustainable. The firm expects EPS deceleration over the next few years.
  
• Piper believes Entropic Comm (NASDAQ: ENTR) is a key benefactor from the general adoption of high definition video consumer goods, as well as from growth in multi-room DVRs. The firm assumed shares with a Buy rating and $10 target.
  
• Cleveland Cliffs (NYSE: CLF) was started with a Buy rating and $135 target at Deutsche Bank. The firm believes CLF is a leveraged play on bulk commodities' momentum.

OTHER INITIATIONS:

• Merrill initiated Allied Capital (NYSE: ALD) with a Neutral rating.
  
• Stifel initiated Blue Nile (NASDAQ: NILE) with a Buy rating and $54 target, and initiated Bank of Florida (NASDAQ: BOFL) with a Buy rating.

MOST NOTEWORTHY: Morgan Stanley, Boardwalk Pipeline and Brasil Telecom were today's noteworthy downgrades:

• Oppenheimer downgraded Morgan Stanley (NYSE: MS) to Perform from Outperform based on limited upside to its revised earnings outlook.
  
• RBC downgraded shares of Boardwalk Pipeline (NYSE: BWP) to Sector Perform from Outperform following the company's Q4 results, due to overruns and project delays.
  
• Brasil Telecom (NYSE: BRP) was lowered to Neutral from Overweight at JP Morgan on corporate governance share concerns.

OTHER DOWNGRADES:

• Wachovia lowered Gibraltar Industries (NASDAQ: ROCK) and Masco (NYSE: MAS) to Market Perform from Outperform.
  
• Citigroup lowered Blue Nile (NASDAQ: NILE) to Hold from Buy.

Blue Nile (NASDAQ: NILE), a leading online retailer of diamonds and jewelry, is recently down $14.64 (or over 27%) to $39.20 in pre-open trading.

NILE management indicated Q1 consumer spending on luxury goods is looking soft, and will likely impact future results.

RBCM has a target price of $55 on NILE. NILE over all option implied volatility of 126 it above its 26-week average of 65 according to Track Data, suggesting larger price movement.

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