After hitting a one-year high of $53.65 in October, the stock has hit a new one-year low today. This morning, WFMI opened at $30.17. So far today the stock has hit a low of $28.96 and a high of $30.21. As of 12:10, WFMI is trading at $29.37, down $4.27 (-12.7%). The chart for WFMI looks neutral and improving, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider an August bear-call credit spread above the $37 range. A bear-call credit spread is an options position that combines the purchase and sale of call 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 a 7.1% return in three months as long as WFMI is below $37 at August expiration. Whole Foods would have to rise by more than 26% before we would start to lose money. Learn more about this type of trade here.

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• Goldman downgraded the coal sector to Cautious from Neutral, citing valuations and expectations for lower coal prices. The firm downgraded CONSOL Energy (NYSE: CNX) Peabody Energy (NYSE: BTU) to Neutral from Buy and Arch Coal (NYSE: ACI) to Sell from Neutral.
  
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• Lehman lowered Bayer (OTC: BAYRY) to Equal Weight from Overweight and Whole Foods (NASDAQ: WFMI) to Underweight from Equal Weight.

Shares in high-end grocery retailer Whole Foods (NASDAQ: WFMI) have slid around 20% since early November. The most obvious explanation for the pullback -- investors remain concerned that a weakening housing market and continued turmoil in the credit markets could result in a slowdown at Whole Foods.

However, the company is more resistant to these pressures than many investors realize. Americans have shown an increasing desire to eat healthier -- a trend that has allowed sales of organic foods to grow at three times the rate as those at conventional groceries. As the largest retailer of organic products, Whole Foods is well-positioned to benefit from this trend.

Moreover, while the company is the clear leader in the organic grocery niche, it's still a minnow compared to traditional grocery giants like Safeway and Kroger. With only around 200 stores spread across the U.S., the U.K. and Canada, Whole Foods still has plenty of untapped markets to expand into over the coming years.

Two additional factors are also weighing on the shares at the moment. The first is a general fear regarding the potential impact of increasing competition in the organic foods market. In recent years, traditional grocery chains have been adding to their selection of organic foods. At the same time, new entrants, such as Britain's Tesco, are also targeting the space more seriously. However, Whole Foods remains the undisputed leader in this market and offers the widest product selection. Furthermore, there's plenty of room for multiple competitors in this growing space.

Finally, the U.S. Federal Trade Commission (FTC) continues to pursue an antitrust case against Whole Foods' merger with rival Wild Oats Market. However, the FTC's case is weak and was strongly rejected by a judge earlier this year. The courts also rejected the government's attempts to block the merger pending an appeal -- Whole Foods has now completed the deal. It's highly unlikely that an appeals court will overturn the deal and break up the merger.

If you are interested in more analysis from Paul Tracy, you can find it at StreetAuthority.com

A classic case of misdirection: Whole Foods (NASDAQ: WFMI) reported weak earnings, but raised its dividend, sending its shares up as much as 7% after hours.

Whole Foods earned $33.9 million, or 24 cents per share, in its fourth quarter, down from $39.8 million, or 28 cents per share, a year earlier. The company blamed costs of merging with Wild Oats for much of the drop. Revenue rose 35% to $1.74 billion, in large part because of the merger.

But same-store sales were up an impressive 8.2%.

All in all, the market might have been dissatisfied with the numbers and pushed down the stock, especially in an environment where weak numbers can be especially punishing to a stock's price. But Whole Foods was clever and got around that. According to TheStreet.com, WFMI "increased its dividend 11% to 20 cents per share," making the stock more attractive to investors who may have concerns about earnings.

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

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• RBC Capital Markets resumed coverage of Whole Foods Market Inc (NASDAQ: WFMI) with an Outperform rating and $55 target.

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• Goldman raised O'Reilly Automotive (NASDAQ: ORLY) to Buy from Neutral.

• BMO Capital upgraded General Mills (NYSE: GIS) to Outperform from Market Perform.

Things looked pretty rough for the Whole Foods Market (NASDAQ: WFMI) bid to merge with smaller rival Wild Oats (NASDAQ: OATS). In late July, the Whole Foods CEO got himself in trouble over online message board comments and that pushed the stock to a 52-week low of $36. Then the FTC tried to block the merger on the grounds that putting the two companies together would create an operation that would raise prices on organic food.

Since late July, however, Whole Food shares are up 25% while Wild Oats trades just below its 52-week high, at $18.46. In August, short sellers cut their position in Whole Foods by 9.3 million shares to 15.1 million. It was the largest single drop in shares sold short for any company traded on the Nasdaq.

The FTC went so far as to take the fate of the merger to federal court, but both a District and Appeals Court failed to halt the merger. The first case was filed in June and, according to MarketWatch, asked the judge "for a preliminary injunction blocking the deal, pending a full review."

A successful merger is likely to have quick benefits for Whole Foods. Last quarter the smaller Wild Oats made only $1.9 million on almost $312 million of revenue. The organic food retailers costs need to come down.

Cutting those costs is likely to be the first thing that Whole Foods does.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Wal-Mart (NYSE: WMT) has been buying retail chains and entering joint ventures all over the world to improve its international exposure. Now, with same-store sale in the U.S. in trouble, it is setting up a unit to look at acquisitions in the U.S. as well.

According to the Financial Times [subscription], with UK retailer Tesco moving into the U.S. with its "Fresh & Easy" small format neighborhood groceries, Wal-Mart may think that it cannot afford to ignore the success of niche stores.

Wal-Mart could certainly use something to jump start sales in its home market, and groceries may be a good place to start.

There are several retailer operators that could end up on Wal-Mart's radar. One is likely to be Whole Foods (NASDAQ: WFMI), which is about to merge with competing organic food chain Wild Oats (NASDAQ: OATS). At the larger end of the market are operators like Kroger (NYSE: KR), which has a market cap of over $19 billion but has about 3,500 stores and annual sales of over $66 billion. Wal-Mart's market cap is $179 billion.

Wal-Mart needs a lot of help in the U.S. -- it may just buy itself a turnaround.

Douglas A. McIntyre is a partner at 24/7 Wall St.

The FTC's bid to block Whole Foods' (NASDAQ: WFMI) acquisition of Wild Oats (NASDAQ: OATS) has ended in failure. A three-judge panel of D.C.'s U.S. Court of Appeals rejected the government's appeal to have the merger blocked. The judges ruled that the FTC had failed to show that Judge Paul Friedman, who denied the government's motion a week ago today, had acted improperly. Last Thursday, the

Whole Foods says it will close the deal as soon as possible. CEO John Mackey likely remains on the hot-seat, and his anonymous message board ramblings are still the subject of an SEC investigation.

Now that the merger is done, investors can begin to discuss how the merger will impact Whole Foods as a stock. The FTC's effort to block it indicates that it should be very good indeed.

Reuters has written that the progress in the Whole Foods (NASDAQ: WFMI) merger with Wild Oats (NASDAQ: OATS) may be a sign that other mergers being scrutinized by the US government may have an easier time of getting approval. Not likely.

The FTC has tried to block the Whole Foods deal because it may raised the amount that consumers have to pay for organic food. Of course, other food retailers offer these products, so the government's position was probably always a bit thin. The agency went to federal court to try to block the marriage, but was unsuccessful.

Now Reuters is floating the theory that the apparent success of the grocery store merger may make it easier for Sirius (NASDAQ: SIRI) to merge with rival satellite company XM (NASDAQ: XMSR).

The concept is full of holes. Sirius and XM are a de facto duopoly and, merged, would be a monopoly. Their ability to send satellite signals with radio content to receivers is not a business that any other company can enter. That is not really a bit like the Whole Foods situation.

The SIRI/XMSR merger is also a deal that faces opposition in Congress. Legislators want to know why they should countenance a business combination that not only lacks any competing technology but is also one that may use its position to raise rates over time.

The news about the Whole Foods merger may be good for it, but the deal has nothing to do with satellite radio.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Given Whole Foods Market (NASDAQ: WFMI) CEO John Mackey's penchant for posting too much information on his blog/anonymous message boards, it might seem ironic that the company is considering suing the FTC for inadvertently posting the company's trade secrets on the internet.

On Tuesday, the FTC failed to completely redact Whole Foods' trade secrets from a court filing that was posted on an online database. Reporters caught the glitch, and information was leaked.

Some of the information that should have been redacted included an assertion that Whole Foods prevents its suppliers from selling directly to Wal-Mart (NYSE: WMT) in an effort to raise the retailer's costs.

Both Whole Foods and Wild Oats (NASDAQ: OATS) have an option to terminate the merger agreement if it does not gain regulatory approval by the end of the month.

Shares of Wild Oats continue to languish more than 20% below the agreed upon price, indicating investor skepticism about the deal's prospects.

Sellers took control at the open and sent the market lower. The Dow Jones Industrial Average got with striking distance of the August 1st low -- down 200 points -- before rebounding to close down only 31 points.

The NYSE had volume of 4.3 billion shares with 1,279 shares advancing while 2,058 declined for a loss of 14.27 points to close at 9,435.04. On the NASDAQ, 3.2 billion shares traded, 1,309 advanced and 1,792 declined for a loss of 11.6 to 2,544.89.

Eaton Corporation (NYSE: ETN) rose $6.98 (8%) to $93.45. Las Vegas Sands Corp. (NYSE: LVS) fell $7.68 (-7%) to $100.47. Coventry Health Care, Inc. (NYSE: CVH) strengthened $3.26 (6%) to $54.38. Whole Foods Market, Inc. (NASDAQ: WFMI) fell $2.58 (-6%) to $42.27. Darden Restaurants, Inc. (NYSE: DRI) rose $2.15 (5%) to $42.94.

With the market plunging on the open, the options were active. There were 8.8 million puts and 8.3 million calls traded for a put/call open interest ratio of 1.07. Garmin Ltd. (NASDAQ: GRMN) saw heavy volume on the August 45 calls (GQRHI) with over 259,000 options trading. The August 75.0 Garmin calls (GQRHO) moved 121,000 options. Most of this option volume is dividend arbitration in anticipation of the 0.75 cent dividend Monday.

Apple Computer, Inc. (NASDAQ: AAPL) saw heavy volume on the August 130 calls (APVHF) with over 55,000 options trading. Financial Sector SPDR ETF (NYSE: XLF) saw heavy volume on the September 34 puts (XLFUH) with over 234,000 options trading. The other strikes were active as well and they investors were likely trying to protect investments capital. PowerShares QQQ Trust ETF (NASDAQ: QQQQ) saw heavy volume on the September 45 puts (QQQUS) moving 171,000. Put index options can work as an insurance policy against market falls.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.

For some reason a Wall Street Journal columnist, Collin Levy, has decided to defend Whole Foods Market (NASDAQ: WFMI) CEO John Mackey, who is under fire for pumping Whole Foods stock anonymously on Yahoo! message boards, sending emails to his company's board talking about acquiring Wild Oats as a way to eliminate competition, and just generally doing a pretty good impersonation of Patrick Byrne.

Talking about labor unions, he's said that "The union is like having herpes. It doesn't kill you, but it's unpleasant and inconvenient."

Mr. Levy would have us believe that the controversy swirling around Mackey, and the calls for his firing/resignation are payback for his union busting. But the fact is that Mackey, through sheer stupidity and arrogance, has gotten himself in trouble with the SEC, and may very well have given the FTC enough rope to stop the Wild Oats deal.

Combine that with the fact that stock is about 50% off its high, and you have to at least consider the idea that maybe it's time for new, more sane, management at Whole Foods.