The earnings season beginning today (Tuesday) is shaping up to be an important one, as it could have a significant impact on a struggling stock market rally.

Since the stock market rally reached a pinnacle nearly two weeks ago, the Dow Jones Industrial Average has lost about 3.3% while the Standard & Poor’s 500 Index has fallen about 3.7%. And if this week’s earnings report come in below expectations, the rally that helped stock prices surge more than 50% could come to an abrupt end.

Fortunately, many of the companies set to report earnings this week are traditionally strong performers and for the most part, companies that have weathered the financial crisis. But not all of them have met Wall Street’s expectations.

The quarterly results for five companies in particular – Yum! Brands Inc. (NYSE: YUM), Alcoa Inc. (NYSE: AA), Costco Wholesale Corp. (Nasdaq: COST), Monsanto Corp. (NYSE:

...

Why Is Beijing Investing $200 Billion in One Company? The answer is simple. This rail company hauls 25% of the world’s freight – but it only has 6% of the world’s track. Right now, freight supply is 65% shy of demand. Sales for this company have grown on average 47% over the last five year. And now, with a $200 billion infusion, it’s about to jump even higher. Estimates show the potential gains at 356%. Click here for the full report.

By Bob Blandeburgo
Associate Editor
Money Morning

The much-anticipated earnings report from Wal-Mart Stores Inc. (NYSE: WMT) and new data from the U.S. Department of Commerce yesterday (Thursday) showed that consumers are not only reeling in their discretionary spending, but may also be pulling the reins on the necessities.

Retail sales fell 0.1% in July from the previous month, and 8.3% from a …

Costco Wholesale Corp. (COST) said today that total sales for the month of June declined 4% to $6.9 billion.

The warehouse club operator's same-store sales slipped 6%, still matching the Street's view. Same-store sales contracted 6% in US locations, while it fell by 3% in international markets.

The company attributed the sluggish performance to weak discretionary spending by consumers amid recessionary conditions, partially offset by growth in food items and sundries.

Costco also said that average transaction in June slipped 9.5% year over year, including the negative impact of lower gas prices as well as a stronger dollar.

Analysts, on average, have lowered expectations for the year ending August 2009, sending the consensus down by a penny to $2.48 per share over the past 2 months.

Shares of Costco are down about 1% on volume of approximately 4.1 million, compared to the average daily volume of about 4.5 million.

COST is a Zacks #3 Rank

...

Costco Wholesale Corp. (COST) announced fiscal third-quarter earnings that fell short of the consensus due to reduced discretionary spending by consumers, along with a stronger dollar.

The warehouse club operator reported earnings of 48 cents per share, missing the consensus forecast by 6 cents. Profit was 67 cents in the same period of fiscal 2008.

Revenue fell 5% to $15.8 billion as same-store sales declined 5% in the US and 12% in International markets.

The full-year consensus estimate is down 2 cents over the past 2 months to $2.49 per share.

COST, a Zacks #3 Rank ("Hold") stock, has slipped 4% today on volume of approximately 3.5 million, compared to average daily volume of about 5.5 million.

Meanwhile, Costco's smaller rival, BJ's Wholesale Club Inc. (BJ) reported first-quarter earnings of 45 cents per share last week, narrowly beating the average forecast by a penny. BJ also boosted

...

Highlights include JC Penney Co., Inc. (JCP), Macy's, Inc. (M), Cost Plus, Inc. (CPWM), Wal-Mart Stores, Inc. (WMT) and Costco Wholesale Corp. (COST).This morning the U.S. Census Bureau announced that April retail sales declined 0.4% vs. expectations of 0.0%; retail sales (ex-auto) declined 0.5% vs. expectations of +0.2%. March retail sales were revised lower.Department stores, electronics, food/beverages, furniture, and online all experienced sales declines in April. Restaurants, sporting goods, health/personal care, and building materials all saw gains in April. On a year-over-year basis, retail sales fell 11.4% in April. The market was clearly disappointed by this news.This was the second straight monthly drop in retail sales, and the eighth decline in the last ten months. Recall that retail sales increased in January and February, and the equity market gravitated to the idea that consumer spending bottomed out in the ...

Highlights include JC Penney Co., Inc. (JCP), Macy's, Inc. (M), Costco Wholesale Corp. (COST) and Wal-Mart Stores, Inc. (WMT).Gasoline prices are climbing, and that is creating another headwind for retailers.According to AAA's Fuel Gauge Report, the national average price of gasoline is $2.23/gallon for regular and $2.45/gallon for premium. These prices look pretty cheap compared to May 2008, when the national average was $3.71 for regular and $4.08 for premium, but not so good compared to January 2009.Unfortunately, gas prices have been steadily climbing since the beginning of the year. The price of regular gasoline bottomed out in December 2008 around $1.65/gallon. The price has climbed about 35% in the last five months.Higher gasoline prices take a bigger bite out of consumers' wallets, and they have less to spend on discretionary items like clothes, shoes or house wares. ...

The economic downturn may finally be easing, after all. Ahead of the release of results from regulatory stress tests for banks on Thursday, retailers reported a 1.2% rise in same-store sales for April.

However, industry experts cautioned against a sweeping idea that these early gains would extend into a broader upswing for the industry that has been gasping for relief from a prolonged sales drought. Market watchers indicate that many stores are still seeing declines, including big names like Costco Wholesale Corp. (COST) and Saks Inc. (SKS). While Costco saw an 8% decline in comparable-store sales in April, Saks posted a 32% drop in comps during the period.

Industry behemoth Wal-Mart Stores Inc. (WMT), however, cleared the gloom for investors. The retailer posted a 5% gain in April sales on the strength of Easter-related shopping at its U.S. stores open at least

...

Costco Wholesale Corp. (COST) said same-store sales for March declined 5%, due to lower gasoline prices and the strengthening of the US dollar.

This Zacks #4 Rank ("Sell") stock is down more than 2% today.

Total sales contracted 3% to $6.4 billion during the month, compared to the same period last year as same-store sales declined 2% in the US and 13% in International markets.

Earnings estimates for the current fiscal year are down 2 cents over the past month and 22 cents over the past 60 days to $2.52 per share.

"COST" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research

Dragged down by plunging gasoline prices and an auto industry struggling for survival, retail sales fell by 1.8% in November for a record fifth straight month, according to the U.S. Commerce Department.

But a historic drop in retail gasoline prices and auto sales may have exaggerated the decline.  Filling-station sales mirrored the recent drop in prices from $4 a gallon in July to less than $2 a gallon recently. Auto sales fell 2.8%, confirming automakers’ assertions that business had sunk to the lowest levels in decades.

Excluding gasoline, which fell by almost 15%, retail sales fell just 0.2%.

In fact, without sales of autos, gasoline and building materials, sales actually rose 0.5%, the most since May.

“The financial markets were braced for a horrific retail sales report for November, but the numbers were actually not so bad,” Mark Vitner, a senior economist for Wachovia Corp. (

...

Costco Wholesale Corp. (COST) announced that its fiscal first-quarter profit was flat. Net income for the quarter amounted to $262.5 million or 60 cents a share, compared to the previous year's earnings of $262 million, or 59 cents a share. Analysts had forecasted a profit of 62 cents for the current quarter.

Revenue this quarter jumped 3.7% to $16.4 billion from $15.8 billion.

Shares are down almost 3% this afternoon. Costco is a Zacks #4 Rank ("Sell") company.

"COST" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research