Both Northrop Grumman Corp. (NYSE: NOC) and Marathon Oil Corp. (NYSE: MRO) Tuesday reported losses in their respective fourth quarters due to large impairment charges.

Los Angeles-based defense contractor Northrop posted a loss of $2.54 billion, or $7.76 per share, compared with a profit of $457 million, or $1.32 per share, in the same period a year earlier. Results were hurt by a $3.06 billion charge related to overestimating the value of past acquisitions in its shipbuilding and space operations.

If you've been watching earnings this past week, or if you read last week's Week in Preview, then this coming week may leave you feeling a bit like Bill Murray in Groundhog's Day. That is, again analysts surveyed by Thomson Reuters expect earnings declines to be more frequent and deeper than earnings gains.

Motorola Inc. (NYSE: MOT), Dow Chemical Co. (NYSE: DOW), Anadarko Petroleum Corp. (NYSE: APC), IAC Interactivecorp (NASDAQ: IACI), Moody's Corp. (NYSE: MCO), Elizabeth Arden Inc. (NASDAQ: RDEN), Devon Energy Corp. (NYSE: DVN), Diebold Inc. (NYSE: DBD), Tyco International Ltd. (NYSE: TYC), United Parcel Service (NYSE: UPS), Cisco Systems Inc. (NASDAQ: CSCO), Polo Ralph Lauren Corp. (NYSE: RL), ITT Corp. (NYSE: ITT), and Walt Disney Co. (NYSE: DIS) are scheduled to report quarterly results this week, and they're all expected to report double-digit declines in earnings.

But again this week, let's take a look who Wall Street feels may have done well in the past quarter.

Northrop Grumman (NYSE: NOC - option chain) shares have moved higher today after with other large defense contractors after President Bush and Defense Secretary Gates recommended that President-elect Obama increase overall defense spending for at least the next five years. This comes just one day after NOC CEO Ron Sugar said that he expects steady spending for at least the next two years. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NOC.

NOC opened this morning at $36.80. So far today the stock has hit a low of $35.24 and a high of $38.05. As of 12:35, NOC is trading at $37.70, up 90 cents (2.4%). The chart for NOC looks bullish and S&P gives NOC a positive 4 STARS (out of 5) buy ranking.

For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $30 range. A bull-put credit spread is an options position that combines the purchase and sale of put 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 an 8.7% return in just one month as long as NOC is above $30 at December expiration. NOC would have to fall by more than 20% before we would start to lose money.

NOC hasn't been below $35 at all in the past year and has shown support around $35.25 recently.

Brent Archer is an options analyst and writer 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. At publication time, Brent neither owns nor controls positions in NOC.

This post is part of a series in which TheStockAdvisors.com asked financial experts to name their top stock pick if McCain or if Obama wins the election.

Which stocks would benefit from a victory by either Senator John McCain or Senator Barack Obama? To help investors sort through the sectors and stocks best positioned to benefit in a post-election environment, we posed this question to some of the nation's leading financial newsletter advisors.

Importantly, this is not a partisan report; each participating advisor has provided a favorite stock for both candidates, focused not on political preferences but unbiased stock analysis. Below we feature those stocks and ETFs that the advisors believe will be the winners depending on which candidate prevails.

McCain Stocks:

Roger Conrad - Comcast (NYSE: CCW)
Gregg Early - Elbit Systems (NASDAQ: ESLT)
Elliott Gue - Paladin Resources (Toronto: PDN)
Doug Fabian - Market Vectors Nuclear Energy (NYSE: NLR)
Vivian Lewis - Barclays (NYSE: BCS)
Bill Martin - CGG Veritas (NYSE: CGV)'
Yiannis Mostrous - Lonking Holdings (OTC: CIMHF)
Carla Pasternak - Eaton Vance Tax-Advantaged Dividend Income Fund (NYSE: EVT)
Nate Pile - SPDR Gold Trust (NYSE: GLD)
John Reese - General Dynamics (NYSE: GD)
Nathan Slaughter - USEC (NYSE: USU)
Paul Tracy - Shaw Group (NYSE: SGR)
Kelley Wright - CenturyTel (NYSE: CTL)
Tom Vass - Molex (NASDAQ: MOLX)
Martin Hutchinson - Northrop Grumman (NYSE: NOC), Merck & Co. (NYSE: MRK), EOG Resources (NYSE: EOG)

Obama Stocks:

Roger Conrad - SunPower (NASDAQ: SPWR)
Gregg Early - AeroVironment (NASDAQ: AVAV)
Elliott Gue - SunPower (NASDAQ: SPWR)
Doug Fabian - Industrial Select Sector SPDR (NYSE: XLI)
Vivian Lewis - Cosan (NYSE: CZZ)
Bill Martin - Geron (NASDAQ: GERN)
Yiannis Mostrous - Dr. Reddy's (NYSE: RDY)
Carla Pasternak - Kinder Morgan Energy Partners (NYSE: KMP)
Nate Pile - Apple (NASDAQ: AAPL)
John Reese - American Eagle (NYSE: AEO)
Nathan Slaughter - Fluor (NYSE: FLR)
Paul Tracy - Market Vectors Global Alternative Energy (NYSE: GEX)
Kelley Wright - Cardinal Health (NYSE: CAH)
Tom Vass - Ingersoll Rand (NYSE: IR)
Martin Hutchinson - Microsoft (NASDAQ: MSFT), Time Warner Inc. (NYSE: TWX), First Solar (NASDAQ: FSLR)

In business, as in international relations, there are battles you fight and battles you don't fight.

It looks like Boeing's decision earlier this year to protest the U.S. Department of Defense's award of an aerial refueling tanker contract constituted a savvy corporate tactic. Government auditors first ordered a rerun of the competition, and then today U.S. Secretary of Defense Robert Gates delayed the $35 billion award contest, saying there isn't enough time to complete the contest fairly, by the end of the Bush Administration, the Pentagon announced.

"Over the past seven years the process has become enormously complex and emotional -- in no small part because of mistakes and missteps along the way by the Department of Defense," Secretary Gates said in a statement. "It is my judgment that in the time remaining to us, we can no longer complete a competition that would be viewed as fair and objective in this highly charged environment."

Gates added that the 'cooling off' period will allow the next administration to objectively review the military requirements and craft a new acquisition strategy for the refueling tanker.

Yesterday I speculated that McCain picked Sarah Palin as his VP over the objections of his advisers. I thought that McCain -- who prides himself on fighting corruption in politics -- somehow saw himself in her. But both politicians have experience with the very thing they pride themselves on fighting.

In the case of McCain, his efforts to rid politics of the corrupting influence of corporate money followed his protection of Charles Keating who was securing a real estate deal for his wife, Cindy. The bankruptcy of Keating's S&L cost taxpayers $3.4 billion. More recently former McCain Finance Chair Tom Loeffler, a lobbyist for French company EADS, parent of Airbus, helped it and Northrop Grumman (NYSE: NOC) to prevail in a $35 billion competition for airborne refueling Tankers in February over Boeing Inc. (NYSE: BA) before the General Accounting Office (GAO) concluded that the process was flawed.

Alaska's governor, Sarah Palin, knows a thing or two about lobbyists. The New York Times reveals that she won that post after taking on bribery charges from the oil industry against politicians -- her attack against such corrupting influences helped her prevail over former Alaska governor, Frank Murkowski. That's why it came as a surprise to learn that as governor Palin employed a lobbyist for an energy company for which she procured $500 million in state subsidies so it could build a gas pipeline.

As I suspected, Boeing Inc. (NYSE: BA) was trying to exert pressure to change the terms of the competition when it signaled this week that it might withdraw from the bidding for the $35 billion Air Force contract for airborne refueling tankers. BusinessWeek reports that Boeing wants the Air Force to delay the date for submitting the proposal and to change the specifications to favor Boeing's smaller modified 767.

BusinessWeek also reveals that the competition is tied in with this November's election. John McCain's former finance committee chair, Tom Loeffler, is a lobbyist for EADS, parent of France's Airbus, which has joined with Northrop Grumman (NYSE: NOC) in a bid for the tanker. In June, the General Accounting Office (GAO) agreed with Boeing that the February award to Loeffler's client had process irregularities. So the Air Force announced it would rebid, but it did so in a way that -- if my hunch is correct -- Boeing believes will put Loeffler's French client at a big advantage.

As BusinessWeek points out, if the Air Force sticks with its current schedule and specifications, it will help McCain win Republican-dominated Alabama in November, which is where Northrop would build the modified A330 that it would deliver to the Air Force if it wins the competition. Democratic Washington would benefit if Boeing won the competition.

Reuters reports that Boeing Inc. (NYSE: BA) is signaling that it may not submit a bid for the $35 billion Air Force contract for Tankers -- airborne refueling vehicles. Is Boeing serious about not submitting a bid or is it using its leverage to get the Air Force to revise the bidding process to create a more level playing field?

The tanker contract has a long history. The Air Force awarded it this February to EADS, parent of Airbus, and Northrop Grumman (NYSE: NOC). Boeing protested the award citing errors in the way the process was run. The General Accounting Office (GAO) sided with Boeing. And the Air Force announced that it would rebid the contract. But many thought that the rebidding process favored the French company.

Now Boeing is considering not submitting a bid. If Boeing ends up not bidding, it will be an embarrassment for the Air Force, which was bending over backwards to change the specifications to keep Airbus and Northrop in the process so there would be two bidders. Or it might have been to satisfy Thomas Loeffler, an EADS lobbyist who headed up John McCain's finance committee. Regardless of why it was done, if Boeing doesn't bid, the Air Force will be in a tight spot.

Boeing may abandon plans to sell its aerial refueling tanker internationally if it loses its protest of a U.S. Air Force decision to buy $40 billion worth of tankers from a competitor, The Wall Street Journal reported Wednesday [subscription].

Boeing's Mark McGraw, the executive in charge of the program, told The Journal that Boeing had counted on the Pentagon to provide enough volume to make an international tanker business viable.

In February, Northrop Grumman (NYSE: NOC) and partner European Aeronautic, Defence & Space (EADS), parent of Airbus, beat out Boeing, the Air Force's only supplier of the aircraft for half a century; the Air Force recently announced that it continues to support that decision. Boeing protested the award to the Government Accountability Office, which must make its recommendation to the Pentagon by Thursday.

Boeing's (NYSE: BA) shares were virtually unchanged on the news in Wednesday mid-day trading, gaining eight cents to $74.43. Northrop Grumman rose $1.03 to $72.09 and EADS fell 46 euro cents to 13.57 euros on the Paris Exchange.

Bloomberg News reports that Boeing Co. (NYSE: BA) has a whole lot of losing going on. Yesterday, Boeing suffered its fourth straight defeat in three months on a U.S. defense contract. This loss represents $41 billion in lost revenue.

Here are the four contracts:

• Yesterday. Lockheed Martin (NYSE: LMT) the world's largest defense company, beat Boeing for a $1.46 billion U.S. Air Force award to build a new network of navigation satellites for military and civilian use. The Air Force said it reviewed five years of past performance for both contractors. Boeing has yet to launch a single satellite under its most recent GPS contract from April 1996, and in 2006 the company forfeited $21.4 million and replaced the program's managers after delays and cost overruns.
• February 2008. EADS, parent of Airbus and Northrop Grumman (NYSE: NOC) won a $35 billion tanker contest for the Air Force. I've spilled much electronic ink on this one -- it looks like the Air Force changed the specifications for the project but only told EADS about the change.

MAJOR PAPERS:

• Harris Corporation (NYSE: HRS), concerned about its future growth, may see limited opportunity and may consider selling itself, the Wall Street Journal reported. If it does decide to sell, suitors could include Raytheon Company (NYSE: RTN), BAE Systems Plc (OTC: BAESY) and Northrop Grumman Corporation (NYSE: NOC).
• The Wall Street Journal reported that, in an attempt to toughen its regulation standards, SEC chairman Christopher Cox said earlier this week the agency would push Wall Street investment houses will have to reduce borrowing and rely less on short-term financing.
• As part of plans to reduce costs and restore profit growth, people close to the situation said that Citigroup Incorporated (NYSE: C) is likely to today identify up to $400B in non-core assets that could be sold. Additionally, the Financial Times reported that Citigroup CEO Vikram Pandit will confirm his pledge to cut the bank's cost base by about 20% at a meeting with analysts today. Sources familiar with the matter believe Pandit will dismiss calls for a break-up of the company.

OTHER PAPERS:

• According to sources, the New York Post reported that the ax may fall as early as next week on some investment bankers at The Bear Stearns Companies Inc (NYSE: BSC).

MOST NOTEWORTHY: Northrop Grumman, Phase Forward and Celestica were today's noteworthy upgrades:

• Cowen upgraded Northrop Grumman (NYSE: NOC) to Outperform from Neutral following the Q1 report based on accelerating growth. Shares were also upgraded at JP Morgan to Overweight from Neutral.
  
• Friedman Billings upgraded Phase Forward (NASDAQ: PFWD) to Outperform from Market Perform following the solid Q1 report and views guidance as beatable.
  
• CIBC raised Celestica (NYSE: CLS) to Sector Outperformer from Sector Performer following Q1 results, citing end markets that look stable.

OTHER UPGRADES:

• JP Morgan upgraded the Consumer Discretionary Sector to Overweight from Underweight.
  
• Wendy's (NYSE: WEN) was raised to Neutral from Sell at Goldman.
  
• Progenics Pharmaceuticals (NASDAQ: PGNX) was upgraded at Citigroup to Hold from Sell.
  
• Merrill Lynch raised Wal-Mart (NYSE: WMT) to Buy from Neutral.

MAJOR PAPERS:

• What Countrywide Financial Corporation (NYSE: CFC) knew about its mortgage borrowers, and how it handled that information, is under review by Federal investigators, according to the Wall Street Journal. Some of their findings reveal that Countrywide had questionable information, which it then put together many of those mortgages into securities, and sold them to investors.
• The Air Force's award of a $40B contract for aerial refueling tankers to Northrop Grumman Corporation (NYSE: NOC) and European Aeronautical Defense & Space, will be protested by The Boeing Company (NYSE: BA), reported the Wall Street Journal.
• The Financial Times reported that News Corporation (NYSE: NWS) CEO Rupert Murdoch dashed the hopes of Yahoo! Inc (NASDAQ: YHOO) executives seeking an alternative to Microsoft Corporation's (NASDAQ: MSFT) $40B offer after Murdoch endorsed the view of analysts and investors that it could not match the value offered by Microsoft.

OTHER PAPERS:

• According to General Motors Corporation (NYSE: GM) president and COO Frederick A. Henderson, the New York Times reported that the auto maker will not intervene in the dispute between parts supplier American Axle and Manufacturing Holdings Inc (NYSE: AXL) and the United Auto Workers union. Given that the strike has not yet hurt the company's ability to sell vehicles, Henderson said company officials "just have to keep to our own knitting."

Boeing Co. (NYSE: BA) and Airbus go toe to tor for almost very major commercial airline contract in the world. They haul each other into court over international trade practice questions. For pure blood sport, the competition can hardly be matched.

Over the course of the last week, the battle between the two companies moved up a notch as the Air Force gave a $35 billion tanker program to Northrop Grumman Corp. (NYSE: NOC) and EADS, the parent of Airbus. Members of Congress may try to keep the deal with Boeing, and the issue should be messy for several months.

While Boeing and Airbus beat the living daylights out of one another, China is planning to begin to build its own large commercial aircraft. China is one of the biggest markets for the two airplane company leaders, and as the need of big jets there increases, the Asian company was going to be a meal ticket that might last for decades.

Things are not going as planned. According to The Wall Street Journal (subscription required), "China has confirmed plans to set up a company to make large passenger airplanes." The paper also writes that Boeing thinks China will need over 3,300 new jets by 2026.

China could be making its own planes by then, leaving Boeing and Airbus to bicker over military contracts.

Douglas A. McIntyre is an editor at 247wallst.com.

BusinessWeek reports that Boeing Inc.'s (NYSE: BA) loss to Northrop Grumman (NYSE: NOC) and EADS for the $100 billion contract for Air Force tankers -- aircraft that refuel fighter craft while they're in the air -- was a no-brainer from the Air Force's perspective.

BusinessWeek quotes Loren Thompson, a Lexington Institute defense analyst, who concluded that "Northrop Grumman's victory was not a close outcome." Here are two reasons he cited:

• Northrop offered more bang for the buck. While both Boeing and Northrop Grumman satisfied requirements established by the Air Force, Northrop was clearly the better buy. With Northrop, the military could have "49 superior tankers operating by 2013," Thompson said, while Boeing's proposal would give it "only 19 considerably less capable planes" by then.
• Boeing's Tankers did not perform as well as Northrop's. "Boeing didn't manage to beat Northrop in a single measure of merit" -- not in flight range, fuel capacity, speed of delivery, or cost. "Boeing would have to find a lot of problems to overturn this outcome," Thompson told BusinessWeek. The Northrop tanker carriers 250,000 pounds of fuel, compared to 202,000 on Boeing's, a crucial difference considering that refueling tankers must often circle for many hours when military operations require.

I'm writing a book about Boeing and if Thompson is right, the loss raises questions about Boeing's competitive vigor. Not winning this $100 billion deal is obviously not a help for its stock either.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.