Analyst upgrades:

• Barclays believes Procter & Gamble's (NYSE: PG) portfolio mix provides better leverage to stabilizing macro trends. The firm upgraded shares to Overweight from Equal weight and raised its target to $60 from $56. Note the firm downgraded Colgate (NYSE: CL) to Equal Weight from Overweight.
• Deutsche Bank upgraded McDonald's (NYSE: MCD) to Buy from Hold as it finds the risk/reward on shares compelling at current levels and sees upcoming catalysts from McCafe and easing commodity pressures. The firm raised its target price to $65 from $60.
• FBR Capital upgraded Talbots (NYSE: TLB) to Outperform from Market Perform to reflect an attractive risk/reward, reduced risk of a bankruptcy, and merchandise improvements. The firm raised its target price to $4 from $2.
• Nokia (NYSE: NOK) was upgraded to Buy from Hold at Deutsche Bank.
• Analog Devices (NYSE: ADI) was upgraded to Neutral from Underperform at Baird.

Procter & Gamble (NYSE: PG) might not have the best growth rates going these days, but truth be told, I thought the company's Q3 report was acceptable given everything that is going on.

Yes, sales declined by 8%, driven by currency effects. Organic sales, however, increased 1%. Earnings per share increased 2% to 84 cents. This beat Wall Street forecasts by four pennies according to this source.

Energizer (NYSE: ENR), the famous battery company that competes with Procter & Gamble (NYSE: PG), reported Q2 earnings earlier today. According to this source, the results beat expectations on an adjusted basis. Energizer earned $1.12 per share. Analysts thought the business would do three pennies less.

Revenues, however, didn't fare so well. They fell 7%. Not only did the economy affect sales, but the dreaded currency-translation phantom that has been haunting the top lines of all businesses that are exposed to international transactions made its dreaded appearance on Energizer's earnings report. A conservative stance on the part of retailers and their inventory levels was also mentioned as a negative driver for sales in the release.

WD-40 (NASDAQ: WDFC), whose consumer-product colleagues include Procter & Gamble (NYSE: PG) and Clorox (NYSE: CLX), issued its second-quarter report on Wednesday after the market closed. The numbers were a bit rusty (yes, the bad pun was on purpose!).

First, we have a big net-sales drop of over 20%. Then, we have a 50% decline in net income, with earnings coming in at 25 cents per share. And finally, we see that the 25-cent per-share number missed estimates by two pennies according to this source. Management blamed the bad results in part on the weak global economy and on currency translations.

Shareholders of Colgate-Palmolive (NYSE: CL) received some not-so-cool news on Wednesday. The consumer-products business was subjected to a downgrade courtesy of Linda Bolton Weiser of Caris & Co. The analyst changed the designation on Colgate-Palmolive from "Buy" to "Above Average." The effects of currency translations is what she's worried about. She believes that they could be a drag on earnings.

If you're a long-term shareholder, I probably wouldn't worry too much about this downgrade. The stock didn't react much to the news, dropping only modestly at the end of the trading session on Wednesday (it was down like 0.3%). Obviously Colgate-Palmolive, like Procter & Gamble (NYSE: PG), Clorox (NYSE: CLX), and Kimberly-Clark (NYSE: KMB), has great potential as a core investment because of its brand portfolio.

Shares of General Mills (NYSE: GIS) are down over 9% in afternoon trading as of this writing. That's a pretty steep drop for a defensive name. The cereal maker's third-quarter report was the catalyst for the sell-off.

What happened?

Costco (NASDAQ: COST), a warehouse club that competes with BJ's Wholesale Club (NYSE: BJ) and Wal-Mart (NYSE: WMT), reported earnings for the second quarter on Wednesday. The company experienced a significant drop in the bottom line. Costco earned 54 cents per share on a diluted basis. That represented a decline of 26%. Analysts thought that 59 cents per share was doable. It wasn't. Net sales dropped 1%. Excluding gasoline and currency effects, same-store sales went up by 5% overall during the quarter (including those items, comps declined 3%).

Well, now, what does this tell us about Costco? It tells us that the whole thesis that people will be looking to save money by shopping at warehouse clubs doesn't necessarily translate into a successful earnings picture. Hey, what can you do? We're in a grand recession. And it's getting worse. Of course, it should be noted that Costco management must strive to work even harder to get people to spend more money in their stores. In fact, BJ's did pretty well with its numbers: Costco's competitor beat the analysts, even after adjustments.

Late last year my colleague Joseph Lazzaro posted a story about NYU's 'Dr. Doom' Roubini: Stocks may fall another 20% during recession. That has to make one take pause when considering an investment in the stock market today, even after a major drop retesting November lows this week. On the other hand, Warren Buffett went out of his way to encourage the investing public and money managers alike that it was safe to go back into the market.

However, today it has been widely reported that Buffett sold off half of his holdings in Johnson & Johnson and trimmed his stake in Procter & Gamble.

Avon's (NYSE: AVP) stock is up well over 9% as I write this. The market liked the Q4 report. Which is interesting, since the beauty company, whose competitors include Procter & Gamble (NYSE: PG) and Revlon (NYSE: REV), actually missed estimates.

That's always confusing, isn't it? Net sales dropped 9% to $2.8 billion, and earnings per share rose 80% to $0.54. The call, according to The Week in Preview piece, was for a top line of $2.9 billion and a bottom line of $0.59 per share.

Kraft (NYSE: KFT), whose supermarket colleagues include Kellogg (NYSE: K) and General Mills (NYSE: GIS), will be reporting Q4 results tomorrow. Analysts expect the foodstuffs company to report $0.44 per share. Unfortunately, Kraft did $0.44 per share in the year-ago period. So the market doesn't think Kraft will grow the bottom line.

Perhaps that will work in Kraft's favor. With expectations so low, management has the opportunity to surprise to the upside. The company has a decent record in beating Wall Street expectations. Kraft certainly has brands that people like. However, things are becoming more difficult for the consumer. Layoffs are everywhere, and job security has taken a sabbatical. Kraft needs to convince people to pay extra for a package of Kraft-branded cheese or a box of Nabisco Ritz crackers when there are less-expensive generic substitutes available.

Consumer products maker Procter & Gamble (NYSE: PG) is falling today after the company announced earnings this morning, and lowered its full year 2009 forecast.

Going into this morning's earnings release, analysts had been expecting to see the company show earnings of $1.58 per share for its fiscal 2009 second quarter. While the company was able to post $1.58 for the quarter, earnings from continuing operations missed, with a reported $0.94 per share, short of analyst estimates for $0.99 a share.

Colgate-Palmolive (NYSE: CL), a company that shares the supermarket shelves with Procter & Gamble (NYSE: PG) and Clorox (NYSE: CLX), issued a pretty cool earnings report on Thursday. On an adjusted basis, the bottom line rose 10% to an even $1.00 per share during the fourth quarter. That was two pennies better than expectations.

That was a good showing, and it displayed resilience on the part of the company. Colgate-Palmolive also did well in the third quarter. Statements in the press release show that management so far understands how to leverage the brand equity of its consumer-products portfolio to charge higher prices where it can. It might need to, considering that currency exchanges could be unfavorable.

Consumer-products company Kimberly-Clark Corporation (NYSE: KMB), whose colleagues include The Procter & Gamble Compay (NYSE: PG) and Energizer Holdings (NYSE: ENR), reported earnings for the fourth quarter, and they weren't great, at least to me. Sales decreased over 3%, and earnings per share were $1.01 on an adjusted basis, which represented a dive of 9%. According to Stocks in the News, that missed estimates by the proverbial penny. Another weak showing was cash from operations, which fell by 1%. Not disastrous, maybe, and certainly understandable, but disappointing, nevertheless.

One thing to keep in mind is that the swings in the value of the dollar affected net sales. Organic growth actually expanded by 5% in the quarter. Kimberly-Clark doesn't expect much to happen in 2009. Management's headline in the release states that adjusted earnings should be between $4 and $4.20 per share next year. This year, earnings were $4.14 per share. Also to keep in mind is that management is watching pension expenses.

So, how were Johnson & Johnson's (NYSE: JNJ) Q4 earnings? To me, they were par for the course for an iconic blue-chip Dow component. In other words, they weren't the stuff of a growth investor's dreams, but they were solid and respectable and exactly what a long-term investor might expect.

J&J, whose competitors include Procter & Gamble (NYSE: PG) and Merck (NYSE: MRK), didn't fare so well on the top line during the quarter. Sales decreased almost 5%. Not so surprising, considering the way the dollar had been acting. Adjusted income increased almost 7% to $0.94 per share. That balanced things out, and it represented a beat of analyst expectations to the tune of two pennies. But what should we make of the results?

Is J&J a good investment? Well, some would certainly argue that any time is a good time to be in J&J. It's true, really, if you look at a long-term chart and review the health company's dividend history. In fact, I was thinking recently of picking up some J&J. It would be a safer bet than some other companies out there. And Steven Halpern gathered some info on J&J recently that points to the arguably cheap valuation of the business. I tend to agree. But...

WD-40 (NASDAQ: WDFC) reported earnings for the first quarter on Wednesday after the bell, and even though the consumer-products company went beyond what Wall Street was expecting of it, the stock was traded down nonetheless. Of course, it was a pretty bad day on Wednesday for the markets anyway, so some of it was due to that, I suppose. But the major element bringing WD-40 down was its oily outlook.

WD-40 beat the analysts by five cents with a bottom line equal to $0.46 per share. That's a great performance, but management reduced its guidance for the fiscal year. Previously, WD-40 thought it would do somewhere between $1.65 and $1.85 per share for 2009. Now, the range is between $1.60 and $1.75 per share. The market wasn't heartened by that news. Shares of WD-40 declined by over 2% this morning. And that was on top of a 4% decline Wendesday (again, though, it was a down day on Wall Street overall).