Covering the markets right now is almost as tiring as trading in them. Japan rallied sharply and that was supposed to be giving a huge boost to stocks this morning. A downgrade of Portugal and an inflated wholesale inflation reading did not help matters. The reality is that headlines of statements from government officials from U.S. and Europe tended to move the markets more than fundamentals. Then the media sensationalism with urgency behind every single statement made for more directional changes than could be easily counted.

Here were today's unofficial closing bell levels:

Dow Jones 11,613.30 -242.12 (-2.04%)
S&P 500 1,256.88 -24.99 (-1.95%)
Nasdaq 2,616.82 -50.51 (-1.89%)

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Aeropostale Inc. (ARO) reported better-than-expected Q4 earnings and revenue and offered rosy guidance.
• American Eagle Outfitters Inc. (AEO) higher Q4 earnings matched analysts' estimates, but shares rose afterward.
• AnnTaylor Stores Corp. (ANN) swung to a profit in Q4 even though same-store sales dropped; shares fell.
• Cbeyond Inc. (CBEY) received an analyst's upgrade following its Q4 results and guidance for the full year.
• Children's Place Retail Stores Inc. (PLCE) posted strong Q4 earnings even though same-store sales were flat.

Analyst Upgrades

• Deutsche Bank upgraded Southern Copper (SCCO) to buy from hold to reflect valuation and positive near-term catalysts. The firm raised its target for shares to $38 from $35.
• JMP Securities upgraded Ultimate Software (ULTI) to outperform from market perform. The firm cites the company's expanding employee base for the upgrade. The firm has a $40 target on the stock.
• Piper Jaffray upgraded Aeropostale (ARO) to neutral from underweight following the company's Q4 results and raised its target for shares to $31 from $24.
• Kennametal (KMT) was upgraded to sell from conviction sell at Goldman.
• Lifetime Brands (LCUT) was upgraded to outperform from market perform at Barrington.
• Volvo (VOLVY) was upgraded to overweight from underweight at JPMorgan.

Analyst Upgrades

• Citigroup upgraded Reynolds American (RAI) to buy from hold to reflect its improved outlook for the company's market share and pricing. Citi also sees a greater chance of British American Tobacco (BTI) bidding for the rest of Reynolds American it doesn't already own. The firm raised its target price on Reynolds to $59 from $52.
• Stephens upgraded Simmons First National (SFNC) to overweight from equal weight to reflect the company's balance sheet and potential for accretive FDIC-assisted acquisitions. The firm raised its target on shares to $32 from $29.
• FBR Capital upgraded Astoria Financial (AF) to market perform from underperform on expectations the company's net charge-offs will peak in the fourth quarter, limiting downside risk. The firm raised its target on shares to $11 from $10.
• First Solar (FSLR) was upgraded to buy from hold at Collins Stewart.
• Brown-Forman (BF.B) was upgraded to neutral from underweight at JPMorgan.
• Juniper (JNPR) was upgraded to conviction buy from buy at Goldman.

Analyst upgrades:

• Barclays upgraded Exxon (XOM) to overweight from equal weight based on a higher production growth outlook. The firm, which raised its target to $92 from $90, expects Exxon to have organic growth of more than 3% in 2010 and an average growth rate of 2.6% between 2009 and 2013.
• Kaufman Bros. upgraded Palm (PALM) to buy from hold citing the recent pullback in shares and indications that Verizon (VZ) will carry webOS phones as early as 1H10. The firm has a $16 target on the stock.
• Piper Jaffray raised Medicis (MRX) to neutral from underweight and raised its target to $20 from $16. Following a management meeting, Piper said they have increased confidence in Soldyn risk and LipoSonix's safety profile.
• Illinois Tool Works (ITW) was upgraded to buy from neutral at UBS.
• Devon Energy (DVN) was upgraded to outperform from market perform at Wells Fargo.
• Carmike Cinemas (CKEC) was upgraded to buy from neutral at Merriman.

Analyst upgrades:

• Credit Suisse upgraded Stancorp (NYSE: SFG) to Outperform from Neutral citing relative valuation and EPS visibility.
• Jefferies upgraded Cypress Semiconductor (NYSE: CY) to Hold from Underperform after its channel checks indicated the company's capacitive touch screen solution has design traction. The firm raised its target on shares to $10 from $7.50.
• FBR Capital upgraded Pacific Sunwear (NASDAQ: PSUN) to Outperform from Market Perform to reflect improving store channel checks, the company's brand focus and controlled inventory, as well as the firm's belief that guidance could be conservative. FBR raised its target on shares to $9 from $6.
• Advanced Micro (NYSE: AMD) was upgraded to Market Perform from Underperform at JMP Securities.
• Lam Research (NASDAQ: LRCX) was upgraded to Overweight from Equal Weight at Barclays.
• Philips Electronics (NYSE: PHG) was upgraded to Buy from Hold at RBS.

Analyst upgrades:

• Pacific Sunwear (NASDAQ: PSUN) was upgraded to Buy from Neutral by Pali Capital, which cited low expectations, new CEO experience, and compelling risk/reward for the upgrade.
• RBC Capital raised Aruba Networks (NASDAQ: ARUN) to Outperform from Sector Perform, based on increased visibility into wireless networking products.
• J. Crew (NYSE: JCG) was upgraded to Hold from Underperform by Needham after the company reported better-than-expected Q2 report and guidance.
• RBC Capital raised Lundin Mining (NYSE: LMC) to Outperform from Sector Perform, citing updated copper forecasts and valuation.
• Netezza (NYSE: NZ) was upgraded to Buy from Accumulate by ThinkEquity.
• Sanofi-Aventis (NYSE: SNY) was raised to Overweight from Neutral by JPMorgan.
• Williams-Sonoma (NYSE: WSM) was upgraded to Buy from Neutral by Goldman.
• Network Engines (NASDAQ: NENG) was raised to Buy from Hold by Cantor.

Pacific Sunwear (NASDAQ: PSUN) has been losing money and ground in the specialty/teen retailing business, so the company has decided to turn to a new CEO, one with quite a bit of experience in the surfing and skating world. The new head man at PSUN will be Gary H. Schoenfeld, the former CEO at Vans.

The 46-year-old Schoenfeld replaces Sally Frame Kasaks, who had served as CEO since 2006 and board chairwoman since 2007. According to the company, Kasaks will continue to remain with the company as a director. Schoenfeld will take the helm of the retailer on June 29.

The problem with using consumer confidence as a guide to buy stocks is that consumers tend to be fickle.

Nowhere is that more true than in the clothing space, especially the teenybopper clothing space. Fall out of favor with the younger crowd and your business can be destroyed. Poor management decisions don't help, either.

As such, Pacific Sunwear (NASDAQ: PSUN) lost its mojo and has yet to find its way.

While consumer confidence might have soared in April, the move seems to be in response to a two-month surge in stocks versus any real strength on the home front.

The jobs market is still poor with stagnant or declining wages. Corporations are still in lay-off mode and oil prices are marching ever higher. In other words, there are still hurdles to overcome before the "all clear" can be given.

I don't mean to rain on the parade of recovery, but let's not get too far ahead of ourselves.

Analyst upgrades:

• Oppenheimer upgraded OceanFreight (NASDAQ:OCNF) to Perform from Underperform on valuation and a lack of negative catalysts following the recent weakness.
  
• UBS raised Micron (NYSE:MU) to Buy from Neutral citing supply cuts which should improve prices. The target remains $5.
  
• Jesup & Lamont upgraded Atlas Air (NASDAQ:AAWW) to Buy from Hold is positive on the company's 20 year blocked space agreement with DHL and expects the stock to continue higher.
• AK Steel (NYSE:AKS) was added to Goldman's Conviction Buy List and upgraded to Buy from Neutral.
  
• Goldman also upgraded Northern Trust (NASDAQ:NTRS) to Buy from Neutral.
  
• Digital River (NASDAQ:DRIV) was upgraded to Hold from Sell at Stanford.

Analyst downgrades:

• Stephens downgraded shares of Titan Machinery (NASDAQ:TITN) after their survey of farmers indicated declining sales of agricultural equipment. The firm lowered their target to $19 but believes Titan Machinery's long-term growth story remains intact.
  
• Jefferies downgraded Helen of Troy (NASDAQ:HELE) and Blyth (NYSE:BTH) to Underperform from Hold as they believe the further deterioration in the U.S. consumer macro environment could pressure near-term results. The firm lowered its target on Helen of Troy to $13 from $16.50 and on Blyth to $5.50 from $8.
  
• UBS cut Indevus (NASDAQ:IDEV) to Neutral from Buy and lowered its target to $5.50 from $5 following the acquisition offer by Endo Pharmaceuticals (NASDAQ:ENDP).
• AECOM Tech (NYSE:ACM) was lowered to Equal Weight from Overweight at Morgan Stanley.
  
• Amerisafe (NYSE:AMSF) was downgraded at Oppenheimer to Perform from Outperform.
  
• Tractor Supply (NASDAQ:TSCO) was cut to Neutral from Buy at Piper Jaffray.

Analyst initiations:

• KeyBanc initiated Urban Outfitters (NASDAQ:URBN) with a Buy rating and $22 target. The firm believes the Urban Outfitters and Antropologie divisions are under penetrated and have visible growth.
  
• Kaufman Bros. started SuccessFactors (NASDAQ:SFSF) with a Hold rating and $7 target and believes the current demand backdrop could be worse than reflected in current consensus estimates.
  
• CarMax (NASDAQ:KMX) was initiated at Baird with a Neutral rating and $10 target. The firm is impressed with CarMax's business model but does not see a way around the near-term economic headwinds.
• Manulife Financial (NYSE:MFC) and Sunlife Financial (NYSE:SLF) were assumed with Equal Weight ratings at Morgan Stanley.
  
• Oppenheimer started Pacific Sunwear (NASDAQ:PSUN) with a Perform rating.
  
• Kite Realty Trust (NYSE:KRG) was initiated with a Buy rating at Janney Montgomery.

Even though Black Friday sales were better than expected, most retailers saw their November sales plunge. As I posted in April, Wal-Mart Stores, Inc. (NYSE: WMT) would likely benefit from consumers' recession diet. That has proven to be a fairly safe bet, but the scary thing is that just about every other retailer is taking a hit.

A glimmer of good news is that for many of those that hurt, the results were not as bad as expected. Here are the actual results of five retailers (with expected results in parentheses):

• Wal-Mart +3.4%, (+2.1%)
• Costco Wholesale (NYSE: COST) -5%, (-2.4%)
• Limited Brands (NYSE: LTD) -8%, (-11.6%)
• Pacific Sunware (NASDAQ: PSUN) -10%, (-14.3%)
• Bon-Ton Stores (NASDAQ: BONT) -16%, (-14.5%)

An emerging theme is that expectations are so bad that retailers seem able to exceed them. However, there is no guarantee that such outcomes are likely to continue. If retailers do better than expected then forecasters may raise their estimates until retailers can't exceed them.

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.

Analyst upgrades:

• UBS upgraded Pacific Sunwear (NASDAQ: PSUN) to Neutral from Sell and said liquidity is no longer a near-term concern. The firm lowered Pacific Sunwear's target to $1.50 from $3. Citigroup upgraded shares to Hold from Sell on valuation following the recent weakness and believes Pacific Sunwear has sufficient liquidity to remain a going concern.
  
• Calyon believes Reliant Energy (NYSE: RRI) will be successful in unwinding the Merrill Lynch Retail credit sleeve and obtaining alternative collateral. The firm upgraded shares to Buy from Add.
  
• JP Morgan said Cogent's (NASDAQ: COGT) position in homeland security and the defense markets make it less sensitive to an economic downturn, making valuation attractive. JP Morgan upgraded shares to Overweight from Neutral and raised its target to $13 from $10.50.
• Goldman added Research in Motion (NASDAQ: RIMM) to its Conviction Buy List and removed Riverbed (NASDAQ: RVBD) from the Conviction Sell List.
  
• J.M. Smucker (NYSE: SJM) was raised to Buy from Underperform at Merrill Lynch.

Last week, JA Solar Holdings Co. Ltd. (NASDAQ: JASO) posted a quarterly loss and lowered its guidance. But as interest in alternative energy continues to grow, analysts polled by Thomson Financial are still looking for good things from solar energy concerns scheduled to report earnings this week.

Strong growth at Trina Solar Ltd. (NYSE: TSL) in the third quarter prompted it to lift its guidance back in October. Analysts expect the Chinese company to post profits that are 76.3% higher than a year ago, or $1.18 per share on revenues of $268.4 million (+225.0%). Though Trina Solar missed estimates in the second quarter, analysts on average recommend buying TSL. Shares are down 81.4% from a year ago and trading near an all-time low.

Earnings of rival LDK Solar Co. Ltd. (NYSE: LDK) are expect to have risen 47.9% to $0.71 per share on revenues of $486.7 million (+206.6%). Also based in China, LDK has not missed estimates in recent quarters; in fact, it blew past expectations in the second quarter. Yet the consensus recommendation is to hold LDK. Like Trina Solar, LDK's shares are trading near an all-time low; the share price has fallen 50.0% in the past year.

Analysts anticipate third-quarter earnings for Canadian Solar Inc. (NASDAQ: CSIQ) to be a whopping 96.3% higher than a year ago, or $0.54 per share on revenues of $248.0 million (+154.5%). The company easily topped estimates in the previous quarter. ReneSola Ltd. (NYSE: SOL) and Suntech Power Holdings Co. Ltd. (NYSE: STP) are also expected to report earnings growth of 29.7% ($0.37 per share) and 23.8% ($0.42 per share), respectively. All three of these stocks reached 52-week lows last week, and all are considered buys.

Shares of Pacific Sunwear (NASDAQ: PSUN) rose in after-hours trading yesterday after Adrenalina (OTC BB: AENA) announced an offer to acquire the company for $4.50 per share. Shares of PacSun had closed at $3.80. The press release announcing the offer said that the proposed deal would consist of a "combination of cash and Adrenalina common stock" and is " subject to PacSun's Board and shareholders approval, execution of a definitive agreement, obtaining the requisite financing and certain other terms and conditions."

There are so many red flags here that it's hard to know where to begin. Pacific Sunwear has a market cap of $250 million, more than 10 times that of Adrenalina's. Adrenalina also has just $329,000 in cash and a history of huge losses for a company of its size. A few years ago, minnows could gobble up sharks but with credit markets as tight as they are, it's hard to see a company of Adrenalina's size swinging a deal like this.

Then there's the CEO of Adrenalina, Ilia Lekach. You may remember him as the former CEO of Parlux (NASDAQ: PARL), where he made numerous offers to take the company private that quickly disappeared, and frequently complained about market manipulation by short sellers. You can read more about him in Herb Greenberg's "Worst CEO of the Year" column from 2006.

Investors would do well to ignore Lekach's offer based on his history of smoke-blowing, and focus on the mess that is Pacific Sunwear's current operations.

UPDATE: Pacific Sunwear has announced that it has rejected the offer. Shares are down 1.5% today, at $3.74.