Not long ago, I found myself in Sears (NASDAQ: SHLD) buying a video game. While at the point of sale -- which was a nightmare, not because of anything related to the checkout process, but because a jerk cut in front of me and, after the completion of his transaction, proceeded to deluge the poor associate at the register with a bunch of random, techno nerd-talk that said associate clearly couldn't care any less about (but I digress) -- I noticed something pertaining to a Christmas Club card. Sounded interesting, but I didn't pay much attention to the selling material.

Well, last night I was checking out some articles at Brandweek.com, and lo and behold, I came across this one discussing the holiday card. You know how Christmas Clubs work at banks, correct? Same principle applies here. In a simple nutshell, you get the plastic, you store funds on it, and then you can access those funds later on in the season to acquire presents. It's basically like a gift card that you use for budgeting purposes. Not only is Sears involved in this, but so is Kmart. And there's a promotion going on that's mentioned in the article where you can earn a nominal amount of bonus money on it. I don't know the details; I would suggest checking with Sears/Kmart for further information.

Durable goods are products that should last more than 3 years. That usually includes things like appliances, furnishings, and heavy equipment. The Commerce Department tracks this data and the number of orders for these things popped up an extra 4.9% in July, which was a nice surprise.

Why do I care whether North Americans are buying a new fridge? This is actually a metric you should watch for insight into potential corporate profits. If durable goods (which tend to cost a lot) are being purchased at an increasing rate, it bodes well for the companies that produce and sell those products.

What would happen if a brilliant hedge fund manager took over a retailer and ran it with a rigid focus on financial metrics, putting aside all that soft stuff about branding and marketing?

Take a look at Sears Holdings (NASDAQ: SHLD), and you have your answer. While macroeconomic trends haven't exactly been the company's friend, the stock has plunged from close to $200 per share in early 2007 to its current price of $66 per share. Just a few months ago it was trading in he mid-$20s.

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

• Aeropostale Inc. (NYSE: ARO) strong Q2 results beat expectations due to rising same-store sales.
• Agilent Technologies Inc. (NYSE: A) Q3 earnings topped low expectations and revenue declined.
• Analog Devices Inc. (NYSE: ADI) posted better-than-expected Q3 results but shares fell on weaker margins.
• Baidu Inc. (NASDAQ: BIDU) CEO said its new advertising efforts will boost sales over the long run.
• Barnes & Noble Inc. (NYSE: BKS) had a better-than-expected Q2 profit but same-store sales fell.
• BJ's Wholesale Club Inc. (NYSE: BJ) reported solid Q2 numbers and raised its full-year guidance.

Slumping sales did in Sears Holdings (NASDAQ: SHLD) in the second quarter, as the company posted a surprise loss of 17 cents per share (excluding items). The Street expected the company to report earnings of 38 cents per share. Why the staggering disparity?

One reason is that comparable-store sales dropped 8.6% (12.5% at Sears stores and 3.9% at Kmart). Another reason is what the company called "significant items," which include costs associated with store closings and severance (32 cents per share), domestic pension plan expenses (22 cents per share), mark-to-market losses on Sears Canada hedge transactions (8 cents per share), and a positive impact of a reversal of a $62-million reserve (29 cents per share). The store closings include charges that related to the decision to close 28 underperforming stores.

Yesterday it was lower, today it is higher -- the China effect on U.S. stock futures. Stocks are set to open higher Thursday morning after stocks Shanghai markets rebounded 4.5%, prompting a bounce in markets worldwide. Of course, higher oil and commodity prices helped sentiment as well, but an unexpected loss at retail giant Sears tested investors' confidence early on. Several economic indicators, including employment data, will be in focus this morning.

[Update: an unexpected rise in jobless claims, combined with Sears disappointment caused sentiment to sour somewhat. Stocks are headed for a flat to lower open.]

China shares bounced off a two-month closing low on Thursday after a sharp two-week selloff. The Shanghai Composite Index rose 4.5%. Investors reacted the People's Bank of China three-month bills auction as a sign of continued easy monetary policy. Encouraged by the happenings in China, world stock markets rose strongly Thursday.

JCPenney (NYSE: JCP), a mall retailer that competes with Macy's (NYSE: M), Sears Holdings (NASDAQ: SHLD), and Kohl's (NYSE: KSS), reported Q2 earnings on Friday. How were they? They were exactly how you'd expect them to be in this environment: not so good.

Net income did beat expectations, though. According to Bloomberg, the company made 0 cents per share, but that was enough to win the analyst game since the call was for a loss of a penny per share. Total sales, however, decreased almost 8%, and same-store sales plunged well over 9%.

Last week we looked at expectations for some retail earnings. More shopping mall favorites are reporting second-quarter results this week, and analysts surveyed by Thomson Reuters are looking for significant earnings growth from some of them.

Aeropostale Inc. (NYSE: ARO), the teen-focused retailer spun off from Macy's (NYSE: M) in 1998, is expected to post a second-quarter profit that is 44.6% higher than a year ago, or $0.56 per share. Revenue for the quarter is expected to be 19.7% higher, or $451.3 million. For the full year, the forecast so far is for $2.98 per share (+25.8%) on $2.2 billion (+14.6%). Earnings of the New York-based company have matched estimates in recent quarters. The long-term EPS growth forecast is 13.9%, which is better than the retail industry average and rival Abercrombie & Fitch Co. (NYSE: ANF). Aeropostale's earnings multiple is 12x, and this debt-free company's cash flow from operations swung into positive territory in the first quarter. The First Call consensus recommendation is to buy ARO; The Motley Fool identified it as a Wall Street favorite. Shares are down a couple of bucks from the 52-week high of $38.74 back in July, but are still 123.0% higher year to date.

Ad-driven social networking website Facebook is looking for new sources and revenue. The site is allowing outside vendors to open storefronts, which opens Facebook to transaction fees (though it is not be charging them yet) ... and companies on Facebook to the wallets of its users. 1-800-Flowers (NASD: FLWS) is the first to try this approach, having opened for business last week.

Over the next two months, another 20+ stores are expected according to Wade Gerten, CEO of Alvenda, the company that built the storefront application. They will include "very large general merchandise retailers, and very large electronics retailers," according to a report in the Financial Times.

Sears Holdings Corporation's (NASDAQ: SHLD) storied and failed strategy in the last few years under the auspices of investor Eddie Lampert just keeps chugging along. Lampert thought he could turn Sears Holdings into an investment company that happened to have a retail operation attached. Didn't happen.

But, that does not mean Sears is giving up the ghost. The retailer everyone loves to dog as stodgy and out of touch is getting back into one business where it was decades ago: toys. That's right -- and just in time for the 2009 holiday season. Question: will anyone go out of their way to shop at Sears for toys? Is there a compelling reason with so many other quality choices?

I guess Kmart -- part of Sears Holdings (NASDAQ: SHLD) -- has exhausted every other marketing idea it had for luring us back to the shopping aisles. How else to account for launching what must the earliest Christmas shopping campaign in history? The website for the chain now features a snowy village decked out in holiday cheer.

The banner reads "Take A Stroll Down Christmas Lane," and suggests that you can 'beat the Christmas rush" (ha!) by buying your stocking stuffers, gifts, and decorations now. Personally, I can't even predict who I'll still like well enough to give a gift to in six months. Stuff happens.

Sears Holdings (NASDAQ: SHLD), a retailer whose competitive colleagues include Target (NYSE: TGT), Best Buy (NYSE: BBY), and Wal-Mart (NYSE: WMT), wants to improve its brand equity and find a new path to growth. As such, it's willing to employ all kinds of initiatives, especially ones that will form a nice image with the consumer during this dreadful economic contraction.

According to The Wall Street Journal (subscription required), Sears is trying out a program that offers protection against the risk of investing in an expensive appliance during a time when job security is not as secure as it used to be.

The program will run for a specified time period beginning next week, and the basic gist is this: buy an appliance priced $399 or higher on a Sears credit card and, and if you lose your job, Sears will credit one twelfth of the cost every month. Still no job after one year? Keep the appliance, your debt will be forgiven.

Best Buy (NYSE: BBY), the electronics mecca that competes with retailers such as Wal-Mart (NYSE: WMT), Target (NYSE: TGT), Sears (NASDAQ: SHLD), and GameStop (NYSE: GME), will be issuing earnings for the first fiscal quarter on Tuesday, June 16. According to this source, Best Buy will see a decline in net income. Analysts believe that the retailer will do $0.34 per share, which represents a drop of about 20%.

But, according to that same source, Best Buy has beaten the analysts at their game in the last two quarters. If you ask me, I think the company has a good chance of beating the forecast yet again. With all the euphoria in the equities market as of late, and with all the talk about the recession possibly coming to an end late this year, I feel that consumers must have been in a better mood in the most recent quarter. And one would assume a big name like Best Buy would get its share of the traffic.

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

• Aeropostale Inc. (NYSE: ARO) beat profit expectations as revenue and same-store sales both increased.
• Aruba Networks Inc. (NASDAQ: ARUN) received an analyst's upgrade following its Q3 report.
• Buckle Inc. (NYSE: BKE) reported better-than-expected Q1 expectations as revenue surged.
• Campbell Soup Co. (NYSE: CPB) higher Q2 earnings beat expectations and sent shares upward.
• Deere & Co. (NYSE: DE) reported better-than-expected Q3 earnings, sending shares higher.

Sears Holding (NASDAQ: SHLD) is recently trading at $62.10 in pre-open trading, above its close of $50.19. SHLD secured a new $2.4 billion line of credit to help finance purchases through 2012. SHLD reported Q1 of $10.1 billion, versus $11.1 billion in the same quarter a year ago. SHLD June call option volatility is at 64, puts is are at 77 verses its 26-week average of 64, according to Track Data. SHLD puts are priced higher than calls because SHLD is difficult to borrow.

Big Lots (NYSE: BIG) closed at $24.14. BIG is scheduled to report Q1 EPS on May 28. BIG June option implied volatility is at 58; October is at 56; below its 26-week average of 72, according to Track Data, suggesting decreasing price movement.

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