The United States Oil (AMEX: USO) is now down 4.1% at $37.23 and the Market Vectors Oil Services ETF (AMEX: OIH) is down 3.7% at $38.57.  Even the JPMorgan Alerian MLP Index ETN (AMEX: AMJ), which is supposed to not be so tied to oil and gas prices, is down 0.75% at $39.43 against a 52-week high of $41.68.

Maybe dividend hikes are helping to mitigate some of the losses in the major integrated oil outfits.  Exxon Mobil Corporation (NYSE: XOM) is down only 1.2% at $84.60 and Chevron Corporation (NYSE: CVX) is down about 2.1% at $103.75.

The drop is rather large in Schlumberger Limited (NYSE: SLB) with a loss of 3.7% at $69.95 for a loss of about $3 billion in market value.  Baker Hughes Incorporated (NYSE: BHI) has suffered substantially from its highs by a drop of half from its 52-week high and shares are now down 4.4% at $40.97.

Elsewhere shares of Transocean Ltd. (NYSE: RIG) is down 4.4% at $48.08 (down from a high of over $70), while National Oilwell Varco, Inc. (NYSE: NOV) is down ‘only’ 2.2% at $71.12.

Valero Energy Corporation (NYSE: VLO) is even lower by 3.1% at $22.80 even though certain drops in the price of oil will help its operating margins.  The caveat is that refiners need lower prices and actually they need stable prices so that they can have steadier pricing.

While its move to oil is marred by corporate problems tied to its CEO and governance issues, Chesapeake Energy Corporation (NYSE: CHK) is the only stock up on the major oil and gas stocks we follow.

This drop to $98 in crude is the lowest level since roughly February 10, 2012.  This is setting up to be the worst week for crude since the end of September.

JON C. OGG

China’s factory activity slows, as evidenced by the HSBC flash PMI of 48.1, a low reading. (Reuters)

A Brazilian court brings charges against Chevron (NYSE: CVS) and Transocean (NYSE: RIG) over an oil spill. (Reuters)

The inspector general at the Federal Housing Finance Agency finds fault with Fannie Mae and Freddie Mac for spending lavishly on an industry conference. (Reuters)

Royal Dutch Shell (NYSE: RDS-A) receives permission to drill for shale gas in China. (Reuters)

The Joint Committee on Taxation says the so-called Buffett bill would not raise as much money as anticipated as the rich would often find ways around the levy. (WSJ)

Deutsche Bank (NYSE: DB) changes the structure of its U.S. operation to skirt Dodd-Frank rules. (WSJ)

Hartford Financial (NYSE: HIG) to leave the annuity business. (WSJ)

Jim Skinner, CEO of McDonald’s (NYSE: MCD), to retire. (WSJ)

The U.S. is running out of storage facilities for natural gas. (WSJ)

Gary Pruitt, CEO of McClatchy (NYSE: MNI), will become the CEO of the Associated Press. (WSJ)

Verizon (NYSE: VZ) and Comcast (NASDAQ: CMCSA) defend the right of telecoms to buy spectrum from cable companies. (WSJ)

Microsoft (NASDAQ: MSFT) says China still blocks sales of some of its products, including versions of its Xbox. (WSJ)

The Consumer Financial Protection Bureau says student loans now total more than $1 trillion. (WSJ)

German politicians intend to balance its budget in two years. (WSJ)

Watson Pharmaceuticals (NYSE: WPI) will buy Actavis for $5.9 billion in a consolidation of the generics industry. (WSJ)

Morgan Stanley (NYSE: MS) and Citigroup (NYSE: C) may speed plans for the brokerage to take over Morgan Stanley Smith Barney. (WSJ)

Bernanke and Geithner praise the financial progress of Europe in testimony before Congress. (NYT)

Homebuilder stocks reach a two-year high as it appears the housing market may have stabilized. (NYT)

Alaska will support a $40 billion gas line project to transport liquid natural gas. (FT)

Jaguar may invest $3 billion in Chinese car company Chery. (Bloomberg)

The head of airline Emirates says more airlines will falter because of fuel prices. (Bloomberg)

Japan posts a trade surplus. (Bloomberg)

Douglas A. McIntyre

The selling pressure is a result of the lower forecasts for global economic growth this year, which has had a dampening effect on crude oil prices today. Brent crude is down -1.21% at $122.30/barrel and WTI crude is down -1.66% at $104.95/barrel. Neither price drop is likely to have a significant impact on crude oil production unless today’s economic outlook actually comes true. Even then, the economic hit would have to be more substantial than the -0.3% offered up today for the shrinkage in the eurozone.

China, for example, would have to stick by its forecast of 7.5% GDP growth, and the Chinese are notorious for fiddling with things like bank reserve and lending requirements as the country tries to hit its economic targets. That fiddling very often has unintended consequences that add to market volatility.

The most important factor in crude prices is supply. Not Iran, not speculation, not even global GDP. The central issue for this year is whether or not supply can meet demand. As it stands right now it can, but just barely. A little slowdown won’t hurt producers, and it may even help consumers.

The services companies are all trading well below their target prices and any of the big three — Schlumberger, Halliburton, or Baker Hughes — are reasonable risks given the tight supply/demand situation expected this year.

Paul Ausick

The unofficial closing bells put the DJIA down about 1.5 points to 12,981.51 (-0.01%), the NASDAQ rose more than 2 points (0.08%) to 2,966.16 and the S&P 500 rose 0.14% or nearly 2 points to 1,367.59.

There were several analyst upgrades and downgrades today, including Sears Holding Corp. (NASDAQ: SHLD) maintained as ‘underperform’ at Credit Suisse; Interpublic Group of Companies Inc. (NYSE: IPG) raised to ‘buy’ at Deutsche Bank; Dunkin’ Brands Group Inc. (NASDAQ: DNKN) started as ‘buy’ at Citgroup; American Electric Power (NYSE: AEP) raised to ‘buy’ at Jefferies; and United Rentals Inc. (NYSE: URI) started as ‘buy’ at Citigroup.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: The AES Corp. (NYSE: AES) is down -0.51% at $13.73; Balchem Corp. (NASDAQ: BCPC) is down about -17% at $29.52 after posting a new 52-week low of $29.35 earlier; Charter Communications Inc. (NASDAQ: CHTR) is up 0.2% at $63.55 after posting a new 52-week high of $64.39 earlier this morning; Cooper Tire & Rubber Co. (NYSE: CTB) is up nearly 14% at $17.81; El Paso Corp. (NYSE: EP) is up 1.8% at $27.65, a new 52-week high; Lowes Companies Inc. (NYSE: LOW) is up 0.83% at $27.39; Quicksilver Resources Inc. (NYSE: KWK) is down -5.8% at $5.73; Transocean Ltd. (NYSE: RIG) is up 5.34% at $53.44; and Valeant Pharmaceuticals International Inc. (NYSE: VRX) is up 5.6% at $50.62.

Other standouts from today include the following stocks:

ATP Oil & Gas Corp. (NASDAQ: ATPG) is up nearly 20% at $8.63. The independent oil & gas company reported a fourth successful well at its Telemark Hub project.

Cheniere Energy Partners L.P. (AMEX: CQP) is up about 14% at $23.80 after posting a new 52-week high of $24.21 earlier. The liquefied natural gas company announced an investment from Blackstone Group LP (NYSE: BX). More coverage here.

Dendreon Corp. (NASDAQ: DNDN) is down more than -20% at $11.83. The drug maker reported lower-than-expected revenues this morning. More coverage here.

Intermolecular Inc. (NASDAQ: IMI) is down more than -15% at $6.31 after posting a new 52-week low of $6.02. The semiconductor equipment and materials company’s stock is likely reacting to the bankruptcy filing by Japanese chipmaker Elpida.

Microvision Inc. (NASDAQ: MVIS) is down more than -16% at $3.28. The laser display company reported very poor earnings this morning.

Stay tuned for Tuesday. Federal Reserve governor Elizabeth Duke and Cleveland Fed president Sandra Pianalto are giving speeches. We have noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – Durable goods orders
• 9:00 a.m. – S&P Case-Shiller housing price index
• 10:00 a.m. – Conference Board consumer confidence index
• 10:00 a.m. – Richmond Fed manufacturing index
• 10:00 a.m. – State Street investor confidence index
• 11:30 a.m. – 4-week Treasury bill auction

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We have compiled earnings estimates using Thomson Reuters consensus targets and have added color if applicable.

Monday, February 27

Charter Communications, Inc. (NASDAQ: CHTR) has estimates of -$0.32 EPS and $1.83 billion in revenue.  Shares hit a new post-restructuring high on Friday and are up over 50% from the 52-week lows.

Dendreon Corporation (NASDAQ: DNDN) has estimates of -$0.23 EPS and $119.8 million in revenue.  Shares are back up around $15.00, still above the mean consensus target of $12.82 from analysts but still down less than half from its 52-week high and up over 100% from its 52-week low.  This is all about the adoption of PROVENGE from doctors and it is expected to be getting back on track.  Watch guidance closely.  2102 estimates are -$1.61 EPS on $392.6 million in sales.

Lowe’s Companies, Inc. (NYSE: LOW) has estimates of $0.24 EPS and $11.34 billion in revenue.  Home Depot already laid the path here with earnings.  Shares are within 5% or so of a 52-week high after pulling back about $1.00 this last week after Home Depot’s earnings.

priceline.com Incorporated (NASDAQ: PCLN) has estimates of $5.05 EPS and $968.3 million in revenue. Next quarter estimates are $3.73 EPS and $1.02 billion in sales.  This company is now entering the area of its business cycle that analysts are going to be expecting $1 billion in sales per quarter.

Tuesday, February 28

AutoZone Inc. (NYSE: AZO) has estimates of $4.04 EPS and $1.78 billion in revenue.  Another high-priced $300+ stock challenging all-time highs.

El Paso Corporation (NYSE: EP) has estimates of $0.29 EPS and $1.35 billion in revenue.

First Solar, Inc. (NASDAQ: FSLR) has estimates of $1.55 EPS and $782.22 million in revenue.  For the following quarter the estimates are $0.77 EPS and $789.3 million in sales.  For 2012, estimates are for earnings top drop on sales growth of 31% to $3.78 billion.  Can you say ‘endless margin compression’ fast enough?  Shares are down about 75% or more from the 52-week high.

Tech Data Corporation (NASDAQ: TECD) has estimates of $1.66 EPS and $7.16 billion in revenue.  All technology companies who ship out products to retail and wholesale channels will watching.

Transocean Ltd. (NYSE: RIG) has estimates of $0.21 EPS and $2.32 billion in revenue.

Vitamin Shoppe Inc. (NYSE: VSI) has estimates of $212.67 million in revenue.  This one might not sound like much with a $1.26 billion value, but many downstream and upstream companies will be watching.

More previews will be coming for those reports coming Wednesday through Friday after the week gets underway.

As a reminder, some estimates and dates may change or may have already changed.

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JON C. OGG

A judge rules that some of the Gulf spill costs to be covered by Transocean (NYSE: RIG) will be covered by BP (NYSE: BP) instead. (Reuters)

Samsung had record profits on smartphone sales and will increase capex by $22 billion. (Reuters)

An accounting change at Ford (NYSE: F) will change its profits. (Reuters)

Apple (NASDAQ: AAPL) overtook Samsung as the largest smartphone company in the world. (Reuters)

Wellpoint (NYSE: WLP) will change how it pays primary doctors on the theory that early care will prevent expensive diseases. (WSJ)

Executives at bankrupt firms continue to get large bonuses. (WSJ)

European officials say adoption of the Volcker Rule will keep banks from buying sovereign debt. (WSJ)

Investors move out of cotton, copper and crude oil. (WSJ)

Twitter will use the ability to censor tweets to move into some countries where it is blocked. (WSJ)

AT&T (NYSE: T) has fallen behind Verizon (NYSE: VZ) in cellphone sales. (WSJ)

EU leaders expect the size of a bailout fund to rise. (WSJ)

Nokia (NYSE: NOK) says its new smartphones are selling well. (WSJ)

Businesses increase spending as they move into 2012. (WSJ)

Large central banks will continue to use their balance sheets to help national economies. (WSJ)

Starbucks (NASDAQ: SBUX) earnings move higher. (WSJ)

A WPP Group survey shows that consumers rank the performance of global brands higher than they do the moral qualities of the companies that own them. (WSJ)

EU banks that have taken money from the European Central Bank can either keep the money to help their balance sheets or use it to buy risky sovereign debt as a way to stabilize the financials of the region. (WSJ)

IMF studies of the Greek economy show that it is falling apart rapidly. (NYT)

Washington support for wind and solar energy is dropping. (NYT)

The largest hedge fund, Bridgewater Associates, once again turns in strong gains. (NYT)

The Defense Department to cut $485 billion over the next 10 years. (FT)

Large U.S. industrial firms expect sharp growth. (FT)

JP Morgan Chase (NYSE: JPM), which considered leaving the most economically damaged markets in Europe, decides to stay, to some extent, for social reasons. (FT)

BNP Paribas will sell its $11 billion energy loan portfolio. (FT)

Investors continue to pressure Apple to begin to pay a dividend out of its $100 billion in cash. (FT)

CDS numbers show increases in the risk of corporate and sovereign paper. (Bloomberg)

Spain’s unemployment reaches 22.9%. (Bloomberg)

As the economy worsens in Europe, General Motors (NYSE: GM) steps up its attempts to restructure Opel. (Bloomberg)

Douglas A. McIntyre

The well is located in the Mississippi Canyon area of the Gulf, about 20 miles from the location of the Macondo well, where a Transocean rig exploded in April 2010, killing 11 workers and spilling 5 million barrels of oil from a well owned by BP plc (NYSE: BP).

The recent accident is reportedly far less severe. The original report indicated that 319 barrels (about 13,400 gallons) of drilling fluid escaped. MarketWatch reports that Shell now says that 7,560 gallons of oil and 5,829 gallons of drilling fluid leaked into the Gulf.

Federal regulators have approved Shell’s clean-up plan which will include disconnecting the drilling fluid line from the well’s blowout preventer. There is no estimate of how long the well will be shut-in.

Paul Ausick

Foreign investment in China drops for the first time in 28 months. (Reuters)

Holiday sales continue to tick higher, according to the National Retail Federation. (Reuters)

Sony (NYSE: SNE) confirms its 2011 and 2012 targets for PS3 sales. (Reuters)

Amazon.com (NASDAQ: AMZN) shares lose 2011 gains because of concerns about margins. (Reuters)

Lam Research (NASDAQ: LRCX) to buy Novellus Systems (NASDAQ: NVLS) for $3.3 billion. (Reuters)

The SEC will try to appeal a federal ruling that blocked a settlement with Citigroup  (NYSE: C) over toxic mortgage debt.  (WSJ)

Wage increases in China cause the costs of its exports to the U.S. to rise. (WSJ)

Research In Motion (NASDAQ: RIMM) is under pressure to replace senior management. (WSJ)

Shares of Groupon (NASDAQ: GRPN) fall as research firms cut ratings. (WSJ)

Nokia (NYSE: NOK) returns to the U.S. with a $50 smartphone with T-Mobile service. (WSJ)

E-book prices rise quickly. (WSJ)

EU leaders continue to move away from the solid front they had last week. (WSJ)

The NFL signs new nine-year deals with Fox, NBC and CBS, which will pay an average of 65% more than their previous arrangements. (WSJ)

More oil companies seek leases for Gulf of Mexico drilling. (WSJ)

Brazil will try to shutter the operations of Chevron (NYSE: CVX) and Transocean (NYSE: RIG) as the government attempts to collect $11 billion over leak damages. (WSJ)

First Solar (NASDAQ: FSLR) sharply cuts forecasts. (WSJ)

LightSquared’s high-speed internet would hurt GPS signals, according to the federal government. (WSJ)

Credit Agricole sharply cuts expenses in the face of the EU crisis. (WSJ)

Detroit sells $484 million in bonds but at very high rates. (WSJ)

Charles Schwab (NYSE: SCHW) and E*Trade Financial (NASDAQ: ETFC) are hurt by drops in trading volume. (WSJ)

China puts tariffs on U.S. cars with large engines. (NYT)

OPEC increases output levels. (NYT)

IBM (NYSE: IBM) settles an antitrust case with the EU. (NYT)

Foreign-owned banks in the U.S. are losing deposits on a flight to safety. (FT)

Douglas A. McIntyre

Eurozone on notice. The situation in Europe, so promising just days ago, took a sharp turn for the worse. S&P put 17 nations in the euro area on credit watch and said it might even downgrade AAA-rated nations, including Germany and France. In theory, this might increase their borrowing costs. In fact, it probably will. Money from international capital markets investors has already begun to shift into safe haven U.S. Treasuries. The S&P action is yet another warning to EU leaders that economists see the sovereign situation deteriorating, as long as the European Central Bank and International Monetary Fund will not provide substantial aid to the weakest nations in the regions, and the eurozone itself will not quickly create a loan facility. News that Angela Merkel and French president Sarkozy want a treaty to force more fiscal discipline within the region hardly provides a road map for a rescue.

Deepwater Horizon fallout. The fighting among the companies involved in the Deepwater Horizon catastrophe has escalated a year-and-a-half after the rig’s explosion. BP (NYSE: BP) has accused oil services company Halliburton (NYSE: HAL) of suppressing data about its role in the incident. The charge is serious and eventually could lead to accusations of fraud. The firms responsible for the well, which also include Transocean (NYSE: RIG), still face tremendous liability. Thousands of individuals and business have staked claims for damages caused by the explosion and leak. The U.S. government and those of several states may bring actions of their own that could seek large penalties.

USPS cuts. The U.S. Postal System’s management continues to advocate greater cuts to save itself from billions of dollars in losses and the weight of its pension plans. Congress may not support these suggestions. There will be political fallout if hundreds of post offices are closed and tens of thousands of postal union members are fired. The most visible of the suggestions made by the Postmaster General is that first-class mail no longer be delivered in one to three business days. The window for delivery would be lengthened to two to five days. But the postmaster is not the captain of his own fate. His suggestions could fall on deaf ears in Congress.

Facebook ad revenue. Facebook sharply increased its market share of online advertising among portals from 2009 to 2010. The trend is more troubling for Facebook competitors, if the 2006 to 2010 period is used as a measurement. Facebook has 0.6% of global internet ad expenditures among portals in 2006. That number was 3.1% last year. The victims of Facebook’s success are primarily Aol (NYSE: AOL), Microsoft (NASDAQ: MSFT) and Yahoo! (NASDAQ: YHOO), each of which has had little if any improvement in ad revenue so far in 2011 compared to last year.

Shale gas growth. The shale gas industry should support more than 850,000 jobs by 2015 and contribute $118 billion to GDP. That is according to a new study from global research firm IHS. The news is unexpected. U.S. energy job growth was not supposed to come from fossil fuel businesses. It has been widely assumed that America had begun to exhaust those assets. Wind, thermal and solar business were anticipated to be the major creators of energy jobs. All three industries have stumbled due to high costs and slow adoption. The success of shale gas shows that new means of exploration and exploitation of fossil deposits still have a promising future.

Douglas A. McIntyre

The unofficial closing bells put the DJIA up nearly 489 points to 12,044.55 (4.23%), the NASDAQ rose nearly 105 points (4.17%) to 2,620.34, and the S&P 500 rose 4.33% or nearly 52 points to 1,246.94.

There were several analyst upgrades and downgrades today, including Home Depot Inc. (NYSE: HD) reiterated as ‘buy’ with a $46 price target at Argus. Other ratings actions included Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) reiterated as ‘buy’ with a $94 price target at Canaccord Genuity; Netflix, Inc. (NASDAQ: NFLX) cut to ‘underperform’ at Wedbush; Suntech Power Holdings Co. Ltd. (NYSE: STP) reiterated as ‘hold’ at Argus; Transocean Ltd. (NYSE: RIG) cut to ‘hold’ at Argus; and Calpine Corp. (NYSE: CPN) cut to ‘hold’ at Jefferies. See our story on Transocean’s stock offering and proposed debt offering.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading: American Eagle Outfitters Inc. (NYSE: AEO) is up 3.3%, at $13.87; The Fresh Market, Inc. (NASDAQ: TFM) is up 5.7%, at $38.73; Jos. A. Banks Clothiers, Inc. (NASDAQ: JOSB) is down -6%, at $48.09; and SeaDrill Ltd. (NYSE: SDRL) is up 6.3%, at $34.82. After markets close today, Aeropostale, Inc. (NYSE: ARO) and Krispy Kreme Doughnuts Inc. (NYSE: KKD) will report earnings.

Several other standouts from today are as follows…

Zoltec Companies, Inc. (NASDAQ: ZOLT) is up 41.5%, at $8.11. The advanced materials maker reported better-than-expected earnings after markets closed yesterday.

Advanced Analogics Technologies, Inc. (NASDAQ: AATI) is up 32.5%, at $5.75. The power management chip maker is being acquired by Skyworks Solutions Inc. (NASDAQ: SWKS) for $258.6 million, or about $6.05/share.

Patriot Coal Corp. (NYSE: PCX) is up 18.7%, at $10.30.  This coal miner, like virtually all its competitors, is down about -40% for the past 12 months. There’s no news to justify today’s price jump, but the company’s thermal coal does sell well in cold weather.

Avalon Rare Metals Inc. (AMEX: AVL) is up 20.3%, at $3.26. The rare earths miner made this big move on no news, but competitor Molycorp Inc. (NYSE: MCP) did a deal with two Japanese companies to manufacture very powerful magnets in Japan for use in wind turbines and other high-tech products.

JA Solar Holdings Co. Ltd. (NASDAQ: JASO) is up 16.6%, at $1.80. The solar PV maker is among several Chinese solar companies moving up today, no doubt as these are considered the most likely to survive a shakeout in the solar manufacturing sector.

Shutterfly, Inc. (NASDAQ: SFLY) is down -12%, at $27.02, after posting a new 52-week low of $26.93 earlier today. The social media company is facing intense competition for its on-line photo products.

Stay tuned for Thursday. Here’s a list of other noteworthy events scheduled for tomorrow(all times Eastern):

• 8:30 a.m. – New unemployment claims
• 9:45 a.m. – Bloomberg consumer comfort index
• 10:00 a.m – Industrial Supply Management manufacturing index
• 10:30 a.m. – EIA natural gas weekly report
• 4:30 p.m. – Federal Reserve balance sheet
• 4:30 p.m. – Money supply report

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