The unofficial closing bells put the DJIA up nearly 114 points to 13,204.70 (0.87%), the NASDAQ rose nearly 21 points (0.69%) to 3,050.61, and the S&P 500 rose 0.67% or more than 9 points to 1,399.99.

There were several analyst upgrades and downgrades today, including General Dynamics Corp. (NYSE: GD) cut to ‘equal-weight’ at Morgan Stanley; ABB Ltd. (NYSE: ABB) cut to ‘neutral’ at JPMorgan; Harley-Davidson Inc. (NYSE: HOG) raised to ‘overweight’ at Barclays; ConocoPhillips (NYSE: COP) raised to ‘neutral’ at Macquarie; and Sprint Nextel Corp. (NYSE: S) maintained as ‘hold’ at Argus.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Alcatel-Lucent S.A. (NYSE: ALU) is down -16.9% at $19.71 (our coverage here); Altria Group Inc. (NYSE: MO) is up 0.9% at $31.96 (our story here); Pepsico (NYSE: PEP) is down -0.3% at $66.44 (our story here); Tellabs Inc. (NASDAQ: TLAB) is down -5.1% at $3.83 (our coverage here); Exxon Mobil Corp. (NYSE: XOM) is down -0.8% at $86.13 (our coverage here); Aetna Inc. (NYSE: AET) is down -8.4% at $45.22; Bristol-Myers Squibb Co. (NYSE: BMY) is down -1.7% at $33.72; Bunge Ltd. (NYSE: BG) is down -2.6% at $65.69; JetBlue Airways Corp. (NASDAQ: JBLU) is down -0.1% at $4.64; Liz Claiborne Inc. (NYSE: LIZ) is up 9.4% at $13.87; Mead Johnson Nutrition Co. (NYSE: MJN) is up XX% at $XX; Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) is up 4% at $86.38 after posting a new 52-week high of $87.26n earlier today; Safeway Inc. (NYSE: SWY) is down -2.8% at $21.00; Stillwater Mining Co. (NYSE: SWC) is down -4.6% at $10.69; TASER International Inc. (NASDAQ: TASR) is up 5.7% at $4.39; United Parcel Service Inc. (NYSE: UPS) is down -1.8% at $78.25; and Yandex N.V. (NASDAQ: YNDX) is down -5% at $23.31.

Other standouts from today include the following stocks:

Inergy L.P. (NYSE: NRGY) is up 17% at $19.71. The company is being acquired by Suburban Propane Partners LP (NYSE: SPH). More coverage here.

Leap Wireless International Inc. (NASDAQ: LEAP) is down -20.2% at $6.16. The wireless carrier fell sharply on disappointing quarterly results. More coverage here.

Akamai Technologies Inc. (NASDAQ: AKAM) is down -14.8% at $33.03. The technology provider beat estimates but issued weak guidance.

Stay tuned for Friday. We have noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – GDP report
• 8:30 a.m. – Employment cost index
• 9:55 a.m. – Reuters/University of Michigan consumer sentiment index

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Paul Ausick

The unofficial closing bells put the DJIA up nearly 66 points to 13,211.74 (0.50%), the NASDAQ fell nearly 4 points (-0.12%) to 3,091.57, and the S&P 500 rose 0.37% or about 5 points to 1,408.46.

There were several analyst upgrades and downgrades today, including Gap Inc. (NYSE: GPS) raised to ‘buy’ at Janney; Best Buy Co. Inc. (NYSE: BBY) maintained as ‘hold’ at Argus; Lululemon Athletica Inc. (NASDAQ: LULU) started as ‘buy’ at UBS; Micron Technology Inc. (NASDAQ: MU) reiterated ‘buy’ with an $11 target price at Jefferies; and Research in Motion Ltd. (NASDAQ: RIMM) maintained as ‘underperform’ with a $12 target price at Jefferies.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: China Ming Yang Power Group Ltd. (NYSE: MY) is up 4.9% at $2.35; Research in Motion is up 6.8% at $14.67 (more coverage here); and Finish Line Inc. (NASDAQ: FINL) is down nearly -16% at $21.34 (more coverage here). After markets close today Forbes Energy Services Ltd. (NASDAQ: FES) will report earnings. Before markets open on Monday we’ll get earnings from Digital Domain Media Group Inc. (NYSE: DDMG) and Pep Boys – Manny Moe and Jack (NYSE: PBY), which is essentially meaningless now that the Pep Boys are being acquired by a private equity firm.

Other standouts from today include the following stocks:

Enphase Energy Inc. (NASDAQ: ENPH) is up more than 19% at $7.16 after posting an intra-day on its IPO day of $8.24. More coverage here.

ZaZa Energy Corp. (NASDAQ: ZAZA) is up more than 21% at $4.74. The independent oil & gas driller acquired new acreage in a liquids-rich shale play in East Texas.

Liz Claiborne Inc. (NYSE: LIZ) is up about 12% at $13.26 after posting a new 52-week high of $15.39 earlier today. The Wall Street Journal reported that the company was in takeover talks with several private equity firms for about $20/share.

Stay tuned for Monday. St. Louis Fed President James Bullard and Cleveland Fed President Sandra Pianalto are giving speeches. We have also noted the following events on the schedule (all times Eastern):

10:00 a.m. – Institute for Supply Management manufacturing index
10:00 a.m. – Construction spending
11:30 a.m. – 3- and 6-month bill auction

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Have a great weekend!

Paul Ausick

The unofficial closing bells put the DJIA up nearly 70 points to 12,462.47 (0.56%), the NASDAQ rose nearly 26 points (0.97%) to 2,702.50, and the S&P 500 rose 0.89% or more than 11 points to 1,292.08.

There were several analyst upgrades and downgrades today, including Intel Corp. (NASDAQ: INTC) maintained as ‘top tech/semiconductor’ pick at Credit Suisse; Netflix Inc. (NASDAQ: NFLX) cut from ‘neutral’ to ‘underperform’ at BofA/ML; Starbucks Corp. (NASDAQ: SBUX) reiterated as ‘buy’ and estimates raised at Argus; The Walt Disney Co. (NYSE: DIS) cut to ‘equal-weight’ at Barclays; and Macy’s Inc. (NYSE: M) reiterated as ‘outperform’ and price target raised from $32 to $36 at Credit Suisse.

Earnings reports of note since markets closed yesterday include: Alcoa is up 0.27% at $9.45; Emulex Corp. (NYSE: ELX) is up more than 13% at $8.38; and BSD Medical Corp. (NASDAQ: BSDM) is down more than -7% at $2.09. After markets close today Synnex Corp. (NYSE: SNX) reports earnings and tomorrow’s earnings schedule includes Lennar Corp. (NYSE: LEN) and Supervalu Inc. (NYSE: SVU).

Other standouts from today include the following stocks:

WebMD Health Corp. (NASDAQ: WBMD) is down more than -28% at $26.41, after posting a new 52-week low of $25.01 earlier today. The web-based healthcare company’s CEO resigned, the search for an acquirer was terminated, and the revenue outlook for 2012 was lowered.

Complete Genomics Inc. (NASDAQ: GNOM) is down nearly -26% at $2.88. The biotechnology company shipped fewer genomes than expected in the fourth quarter.

Idenix Pharmaceuticals Inc. (NASDAQ: IDIX) is up more than 25% at $12.10, a new 52-week high. The drug maker continues to bask in the reflected glow of yesterday’s takeover of Inhibitex Inc. (NASDAQ: INHX) by Bristol Myers Squibb (NYSE: BMY).

Tiffany & Co. (NYSE: TIF) is down more than -10% at $59.97. The company reported weak earnings and a lower forecast this morning.

Liz Claiborne Inc. (NYSE: LIZ) is down more than -13% at $8.63. The clothing company’s CFO resigned and the company lowered 2012 revenue estimates.

Stay tuned for Wednesday. Chicago Fed President Charles Evans, Atlanta Fed President Dennis Lockhart, and Philadelphia Fed President Charles Plosser are giving speeches. Here are the noteworthy events on the schedule (all times Eastern):

• 7:00 a.m. – Mortgage Bankers Association purchase applications
• 10:30 a.m. – EIA weekly petroleum status report
• 1:00 p.m. – 10-year Treasury note auction
• 2:00 p.m. – Federal Reserve Beige Book released

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Paul Ausick

More Bank Layoffs. Citigroup (NYSE: C) says it will cut another 4,500 jobs and take a $400 million charge. The action is part of a long, painful series of decisions to prune workers from the least profitable parts of the bank. Citi is not alone in this. Bank of America (NYSE: BAC) announced 30,000 layoffs two months ago. Investment bank business leader Goldman Sachs (NYSE: GS) also has announced job reductions. All of these firms are bracing for Federal Reserve stress tests early next year. As the Fed looks for weaknesses in the companies, one of its yardsticks will be costs. Banks have begun efforts to avoid that as an issue.

JCPenney and Martha Stewart. The New York Times reports that JCPenney (NYSE: JCP) will invest $36.5 million in Martha Steward Living Omnimedia (NYSE: MSO). This is an example of one drowning body grabbing at another. Martha Stewart has been hurt by its inability to improve its publishing division revenue. The company also has TV and licensing properties. Among them, sales have fallen recently and Martha Stewart has produced losses. JCPenney recently pushed out its CEO Myron Ullmann. He tried to improve the retailer’s fortunes by creating license arrangements with Liz Claiborne (NYSE: LIZ) and make-up company Sephora. None of these remedies worked. JCPenney has been unable to effectively compete with big-box retailers like Target (NYSE: TGT) or department stores like Macy’s (NYSE: M). JCPenney recently brought in former Apple (NASDAQ: AAPL) retail head Ron Johnson. There is no reason to think that he can turnaround such a troubled company. A license partnership and investment in troubled Martha Stewart is a poor beginning.

Slowing Chinese Economy. China has admitted its economic engine has slowed. Vice Commerce Minister Chong Quan said the government witnessed a pause in economic growth between October and November. PMI figures release last week demonstrated trouble in the manufacturing sector. There is little the People’s Republic can do to improve its fortunes. Large trade partners, especially Japan, the U.S., the UK and the EU all have struggled with their own GDP problems and unemployment. Austerity moves by governments in these regions likely will curb expansion further. Consumer activity by China’s newly created middle class is likely to flag as well. Wages probably will not increase as factory orders drop. The Chinese are savers more than spenders. An economic slowdown on the mainland will reinforce that habit.

Douglas A. McIntyre

Liz Claiborne already has sold assets to reduce its debt. That is no reason for JCPenney to agree to the transaction. Liz Claiborne’s earnings are a sign that the brand is crippled. When the company announced its most recent numbers management said, “a decline in sales of our Partnered Brands segment, including a $37 million decrease in sales of brands that have been licensed or exited, a significant portion of which was associated with our Liz Claiborne family of brands as we transitioned to the licensing model under the JCPenney and QVC arrangements.”

Liz Claiborne had a loss of $90 million in the period that ended on July 2. Its “hot” brands, which include Lucky Brand and Kate Spade, were the reason Liz Claiborne had any sign of life at all.

If Liz Claiborne believed it could turnaround its flagship brand, it would not have set its exclusive license deal with JCPenney. Further, it would not then have agreed to the sale of the brand.

Perhaps JCPenney has decided to buy a weak brand because it cannot afford more expensive ones. If so, it should not shop for brands at all.

Douglas A. McIntyre

AAPL, Inc. (NASDAQ: AAPL) is up 1.4% premarket to $405.80, relative to a 52-week range of $292.49 – $422.86.

Liz Clairborne, Inc. (NYSE: LIZ) is up more than 35% premarket to $6.90, relative to a 52-week range of $4.02 – $7.90. JC Penney announced it would be acquiring rights to the company brand.

Pepsico, Inc. (NYSE: PEP) is up 1.7% premarket to $62.00, relative to a 52-week range of $58.50 – $71.89. The company announced higher-than-expected 3Q earnings.

What these companies can do to turn around differs greatly.  Each apparel retailer is a unique situation.  They are also effectively new companies as far as the public is concerned about three times a year on average.

Aeropostale, Inc. (NYSE: ARO) is just stuck in the mud, or maybe in quicksand.  The former flying-high retailer has lost its cool and trends keep going south here.  We thought this was looking a bit busted months ago when it was still well above $20 and now shares have been flirting with $11.00.  What this teen apparel retailer can do to get back the cool is hard to predict.  Maybe they need the next teen star endorsement.  This is the strongest of our weakest retail/apparel names today.  At $11.30 the market cap is over $900 million still even with a 52-week range of $10.34 to $27.73.  The company is also expected to keep making money, but with no growth and with no outside enthusiasm.  This one has also not loaded itself with long-term debt, but that is about the only good thing to say right now.

American Apparel, Inc. (AMEX: APP) is in limbo.  The company that was supposed to be ‘the next Gap’ just imploded, management scandal, financial woes, and other irregularities just have this one down and out.  Shares have stayed under $1.00 and it is not even a situation here where a stock market recovery is assured to even bring up any support.  Can Ron Burkle fix this situation?  At $0.91, the market cap is $94 million or so and the 52-week range is $0.66 to $1.90.  American Apparel has almost zero following by Wall Street, but let’s just say that finances have not been pleasant here and the moves by outside holders do not imply that shareholders will be treated well.

Coldwater Creek Inc. (NASDAQ: CWTR) has almost been forgotten about and we won’t publish our nickname for this one.  Being the Chico’s-wannabe has done little to drive the company.  SHares began their slide before the recession and the long-term chart just looks like a staircase straight down.  At $1.02, the market cap is $93.5 million and the 52-week range is $0.82 to $5.89.  This one was supposed to be an e-commerce and online winner, but it turns out that this was not the case.  The company is also expected to lose money in 2011 and in 2012.

Liz Claiborne Inc. (NYSE: LIZ) has lost much of its cool and even the Lucky brand has not come to its rescue as many hoped and its flagship brands have not really helped turn the ship either.  AT $4.31, the 52-week range is $4.02 to $7.90.  Liz got crushed going into the recession and this was above $40 in 2007.  Shares are higher than in early 2009, but to say this has foundered would be an understatement.  The market cap is over $400 million and the company has too much debt and not enough liquidity for safety.  Analysts are expecting -$0.55 EPS in 2011 and are looking for $0.20 EPS in 2012.

Pacific Sunwear of California Inc. (NASDAQ: PSUN) has been a shell of its former glory since the peak of the recession.  The performance today after a disappointing back to school season and after having missed prior targets in weeks and months earlier are becoming par for the course.  At $1.47 now, shares hit a 2-year low of $1.26 today.  The balance sheet is going to be a concern if Pac-Sun keeps missing the mark here.  The market cap is just under $100 million here and we are not endorsing anything positive to say at this point with another 30%+ drop on Wednesday.

The Talbots Inc. (NYSE: TLB) is in such a strange place that you have to scratch your head.  The upscale womens apparel retailer has faltered at each time it has tried to turn around.  Shares are now close to where they were at the peak selling of the late 2008 to early 2009 recession.  So much for that would be merger helping it out.  It seems nothing is working here.  Even at $2.78 it has a market cap of almost $200 million and the 52-week range is $2.33 to $13.43.  The one thing that may help is that expectations are so low and there still seems to be some hope for a turnaround next year that gets it closer to break-even again.  Liquidity remains a concern for us longer-term.

What makes apparel/retail so interesting is that the consumer can turn on a company extremely fast.  Every one of these companies was formerly something much greater.  But when those same-store sales turn south as customers go look elsewhere for the next cool, look out.

The good news is that the extreme cyclical and seasonal trends can also work for any of these companies.  One great ad campaign and one great product cycle, and any apparel retailer can be cool all over again.

Unfortunately, these companies and stocks are all in the dog house.  Some more than others.  These all share one thing in common: it will take far more than a stock market recovery to turn these companies around and to save their shareholders.

JON C. OGG

One indication of some renewed strength in retailing comes from Polo Ralph Lauren Corp. (NYSE: RL) and Macy’s Inc. (NYSE: M), though neither yet attributes the new strength to lower cotton prices. Other retailers and clothing makers like Gap Stores, Inc. (NYSE: GPS), Saks Inc. (NYSE: SKS), Lululemon Athletica Inc. (NASDAQ: LULU), and Liz Claiborne Inc. (NYSE: LIZ) are also in line to get a break on clothing prices.

Ralph Lauren reported reported fiscal first quarter results this morning, posting EPS of $1.90 on revenue of $1.53 billion, crushing expected EPS of $1.44 on revenue of $1.41 billion. The company also said it expects revenue growth in high teens to low-20% range in the current quarter and full-year growth in the mid- to high-teens. Both are increases over previous forecasts.

Macy’s raised its full-year EPS guidance today, from a maximum of $2.45 to $2.65. The new number is higher than the consensus estimate of $2.60.

Retailers have gotten more adept at managing lean inventories in order to avoid the substantial discounts they had been forced to make to keep customers coming through the doors. High-end retailers like Saks have benefited from more affluent customers whose shopping habits haven’t fallen off as much as have those of middle-income shoppers.

Neither Ralph Lauren nor Macy’s had anything to say about the cost of goods. In its announcement, Ralph Lauren referred to “cost of goods inflation” as a concern for the fall and holiday selling seasons, but claimed not to be too worried about higher costs because of the store’s strong brands, product appeal, and operational discipline. And for Ralph Lauren customers, a doubling in the price of cotton probably won’t make much difference because the label is worth more than the commodity that carries it.

The same cannot be said for Gap stores or Macy’s though, which depend on a wider mix of customers, for many of whom price is a big deal. The lower price of cotton has yet to really work its way into the cost of goods for these stores, but when it does, it will make the pain of markdowns slightly less and could even lower the selling price of new items.

Expectations for retailers are falling as the weak US economy appears only to be getting weaker. Fears of unemployment, stagnant wages even for those with jobs, high energy prices, and rising food costs will all continue to affect all but the top tier of US consumers. Lower cotton prices, if they hold, could help both retailers and consumers.

With the market down more than -3.5% in the early afternoon, Ralph Lauren shares are up more than 5%, to $126.79, in a 52-week range of $74.50-$141.37. Lululemon shares are up more than 0.5%, at $50.78, in a 52-week range of $15.54-$64.49. Macy’s shares are down less than -1.5%, at $25.08, in a 52-week range of $19.00-$30.62. Gap shares are down nearly -4%, at $15.68, in a 52-seek range of $15.34-$23.73. Liz Claiborne shares are off more than -5%, at $4.88, in a 52-week range of $4.17-$7.90. The Retail HOLDRS ETF (NYSE: RTH) is off about -3.4%, at $96.14, in a 52-week range of $86.74-$114.38.

Paul Ausick

Still, it’s strange to see silver prices turn south. And whatever impact bin Laden’s death had on the price, it is far more likely that new margin requirements that went into effect last week have led to the sell-off. Last Monday, the Chicago Mercantile Exchange raised the margin for speculators by 9.2%, to $9,500 per contract (a contract is 5,000 ounces of silver).

On Sunday, May 1st, MF Global raised its margins on silver by 175%. That brings the margin increase for silver priced at $48/ounce, about $16,000/contract. As traders shed their contracts in silver, other commodities would also be affected as these traders seek more liquidity.

The iShares Silver Trust (NYSE: SLV) has lost nearly 4%, to $45.03, in a 52-week range of $16.73-$48.35. The Global X Silver Miners ETF (NYSE: SIL) is also down about 4%, at $27.28, in a 52-week range of $12.90-$31.34. Gold is also trading down, at below $1,550/ounce, and the SPDR Gold Trust (NYSE: GLD) is down about -0.4% to $151.89, in a 52-week range of $113.08-$153.61. The Market Vectors Gold Miners ETF (NYSE: GDX) is down about -1.5%, to $61.21, in a 52-week range of $45.88-$64.62. The Market Vectors Junior Gold Miners ETF has fallen somewhat more, -2.33%, to $40.68, in a 52-week range of $24.25-$44.86.

Cotton prices have been falling for several days straight now, and are down about -2.5% today, at around $1.5425/pound. Since March, cotton has lost 17%. The lower pricing appears to be the result of lower demand from China and a lower outlook going forward for China. Adding to the cotton’s troubles is the higher cost of cotton. Part of what seems to be happening follows from the old saying that the best cure for high prices is high prices.

Clothing makers like Polo Ralph Lauren Corp. (NYSE: RL), Gap, Inc. (NYSE: GPS), The Limited Inc. (NYSE: LTD), and Liz Claiborne, Inc. (NYSE: LIZ) are also down today. The largest drop is at Liz Claiborne, down almost -3.5%, to $6.08, within a 52-week range of $3.90-$9.39. Either investors don’t see these companies improving much with lower prices for cotton or, more likely, investors don’t believe that cotton prices will continue to fall.

Corn and wheat are both trading down today as well. Corn is down about -2.4%, to $7.3825/bushel and Chicago wheat is again below $8/bushel, at $7.965, while Kansas City wheat is barely below $9/bushel, at $8.995.

Corn prices could be following crude prices today, which are also down slightly. As the summer driving season approaches in the US, a traditionally high-consumption period for gasoline and ethanol, high pump prices could keep US drivers off the road, reducing demand for corn-based ethanol.

It is worth keeping an eye on commodity prices going forward because there is a good chance that the fall in commodity prices will continue if the rapid price rises are not fueling inflation. The US Federal Reserve has taken a lot of heat for ignoring higher food and energy prices, claiming that these are mostly fluctuations in supply and demand and that US core inflation remains below 2%.

If commodity prices continue to drop and headline inflation reverts downward toward core inflation, then the Fed will be vindicated in its interpretation of what’s been happening with commodity prices. The losers will be investors who have poured billions into commodities over the past few years, and especially the past year or so.

The Teucrium Corn Fund (NYSE: CORN) is down about -1.8%, at $45.41, within a 52-week range of $23.79-$48.77. The PowerShares DB Agriculture Fund (NYSE: DBA) is also down less than -0.5%, to $33.93, within a 52-week range of $22.85-$35.58.

Paul Ausick

Glencore’s 2010 revenues totaled $145 billion and profits came in at $3.75 billion. Glencore owns 34.5% of mining company Xstrata PLC (OTC: XSRAY).

Bloomberg is reporting that analysts it has surveyed expect cotton prices to fall by half by the end of this year.  The reason for the drop is increased planting by cotton growers in the US, Australia, and elsewhere. Lower demand for clothing in the wake of higher food and gasoline prices will also work against the price.

Bad weather or other external forces could cause the price to jump as high as $2.30/pound by June, from about $1.97 today. Clothing makers like Liz Claiborne, Inc. (NYSE: LIZ) and retailers like Wal-Mart Stores, Inc. (NYSE: WMT), J.C. Penney Co. (NYSE: JCP) and Gap Inc. (NYSE: GPS) are all facing pressure on margins from the higher cotton prices.

Copper prices have fallen as traders worry that demand may slacken as Japanese carmakers struggle to re-start production. The possibility that radiation contamination in the area around the leaking reactors could delay rebuilding or, in the worst case, make the area completely uninhabitable.

Even if that turns out to be the case, the people dislocated would need to have housing somewhere else, so the demand for copper might slow a little, but it won’t disappear. Copper demand should continue at very high levels. The gap is currently about 400,000 metric tons annually according to The Wall Street Journal.

Korean steelmaker Posco (NYSE: PKX) plans to raise prices on some of its steel products by as much as 20% early next month due to rising costs, particularly for iron ore.

Global oil companies stayed away from both onshore and offshore blocks in an auction held by India’s government. BP plc (NYSE: BP), Royal Dutch Shell plc (NYSE: RDS-A), Exxon Mobil Corp. (NYSE: XOM), Chevron Corp. (NYSE: CVX), and ConocoPhillips Corp. (NYSE: COP) did not participate, while BG Group plc (OTC: BRGYY) and BHP Billiton plc (NYSE: BHP) combined to make just one bid. An uncertain regulatory climate got most of the blame for the non-competitiveness of the auction.

Paul Ausick