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The motel chain Red Roof Inn hit the roof this week with a thud, defaulting on over $350 million of mortgage payments. The chain, purchased by Citigroup Inc.'s (NYSE:C) Global Special Situations Unit and Westmont Hospitality Group from Accor SA two years ago for $1.3 billion, has suffered a drop in overnights of over 10% since the acquisition.

Red Roof Inn was started in 1972 by Jim Trueman. (Trueman is better remembered as the car racing fan, who provided the opportunity for star driver, Bobby Rahal, to start his career.) The company was based in Columbus, OH until its sale to Accor, and returned there after its most recent sale. The chain has grown to 345 locations, in 36 states. 133 of these Inns are owned by franchisees. 131 of the company-owned Inns were put up as collateral for the four mortgages the chain received. Total debt, according to the Wall Street Journal (subscription required), approaches $1.2 billion.

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.

Today felt like one of those slow long pre-holiday trading days where many gainers and losers were seen with low volume. There was no real economic data to absorb and no real earnings reports to pick apart.

That let us only react to a small recovery from the fears that the US could ultimately have the same credit rating fears that were brought up about England yesterday. Here were today's unofficial closing bell levels:

Dow 8,278.04 -14.09 (-0.17%)
S&P 500 887.33 -1.00 (-0.11%)
Nasdaq 1,693.91 -1.34 (-0.08%)

Top Analyst Upgrades & Downgrades

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

Wal-Mart (NYSE: WMT), a retailer that competes with companies such as Target (NYSE: TGT), Sears (NASDAQ: SHLD), and Costco (NASDAQ: COST), issued what I thought was a decent Q1 report. Sales may have been affected by currency effects, but overall, the giant chain seems to be holding up reasonably well.

Revenues dipped 0.6%. The company earned $0.77 per diluted share. No, the bottom line didn't do great in terms of earnings growth. Last year at this time, Wal-Mart made $0.76 per diluted share. That extra penny does not connotate excitement, I can tell you that. But shareholders can comfort themselves by the fact that Wal-Mart came in at the high end of its own guidance. Wall Street analysts pretty much agreed that the business would make about that much.

TheStreet.com's Jim Cramer is seeing signs of a coming boom, but he's still being cautious here.

If you had to define the early cycle, if you had to outline what stocks should be soaring coming out of a recession into a boom and which ones should be faltering, you would have to say the action in this market in the last month is the quintessential behavioral pattern.

What are the components of the early cycle? First, it's the homebuilders. As is typical coming out of a recession, the stocks precede the bottom of housing. That's exactly what's happening with the lowest permits and highest affordability and best mortgage rates and massive inventory. Everywhere, except on Wall Street reporting, the bottom is bursting out. When you read the lead story in the Sunday Philadelphia Inquirer, and it is all about the thousands of prospective homebuyers heading south to pick up condos and homes for half of what they were worth two years ago -- or even less -- and you know that virtually no one has broken ground in the Sunshine State in a year, you can bet that the bottom's actually behind us. This housing market has wiped out all but the most stable private builders and even the public ones are merging as we know from Pulte (NYSE: PHM) (Cramer's Take) and Centex (NYSE: CTX) (Cramer's Take). So, in the next cycle, you can see some profitability developing year over year even though the new homes don't have much margin because the foreclosed homes next door are going for a song. And don't believe this won't change the dynamic of future foreclosures. In most areas, rent is higher than the interest on mortgages, so you will find that second or third job needed to stay in your home. The incentive structure's radically different than a year ago.

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

• Campbell Soup Co. (NYSE: CPB) reported solid Q2 numbers despite competition from store brands.
• DreamWorks Animation SKG Inc. (NYSE: DWA) missed Q4 expectations, sending shares lower.
• First Solar Inc. (NASDAQ: FSLR) said Q4 profit more than doubled due to strong demand.
• Garmin Ltd. (NASDAQ: GRMN) posted a lower-than-expected profit on soft sales and lower margins.
• Heidrick & Struggles International Inc. (NASDAQ: HSII) earnings and revenue declined in Q4.
• Home Depot Inc. (NYSE: HD) earnings beat low expectations even as revenue continued to decline.

Today's data on the horrible jobless and durable goods data was a blow, but the markets ended up sweeping it under the table. For a bit. Then the Obama budget went to Congress with all the entitlement spending packages and tax increases.

Whether or not these make into law and policy is one thing, but the investment community is beginning to wonder now whether the new rules will make it worthwhile to even invest. That is a sad thought and probably an unfair notion in the end, but this is what traders and investors have said. Here are today's unofficial closing bell levels:

Dow 7,182.08 -88.81 (-1.22%)
S&P 500 752.82 -12.08 (-1.58%)
Nasdaq 1,391.47 -33.96 (-2.38%)

Top Analyst Calls

Sears (NASDAQ: SHLD) and Macy's (NYSE: M) could get a little shot in the arm. The largest part of the stimulus package just approved by Congress puts money into a lot of consumer's pockets.

According to Bloomberg, "The costliest item in the economic stimulus plan passed by Congress is a tax credit of up to $400 for individuals earning less than $75,000 year." The benefits of that money may not be long-term but they could be big enough to give troubled retailers some breathing room.

The Wall Street Journal reports (subscription required) that short-sellers are having an impossible time locating shares of Sears Holdings (NASDAQ: SHLD) to borrow. Chairman Eddie Lampert controls about half of the company's stock through his hedge fund, making the shares difficult to borrow. For investors who are able to locate the stock, borrowing costs are running somewhere between 30% and 40% per year.

Given the difficulty short sellers are having, it seems likely that shares of the company are trading at a higher price than they would were the stock more liquid.

On the other hand, 29% of the company's float is currently sold short at those steep interest rates, indicating that a big chunk of investors are incredibly confident that Sears shares have a lot farther to fall.

Macy's (NYSE: M) just cut 7,000 jobs, 4% of its workforce. Almost all retailers are suffering, so the question is which chain will have the next large round of lay-offs.

Bet on Sears (NASDAQ: SHLD). Its K-Mart and Sears stores have been doing poorly. If Macy's has to let people go, Sears has to be facing similar trouble.

According to the AP, Sears same-store sales fell 7.3% in December. On that basis, sales in Sears U.S. stores dropped almost 13%. That kind of erosion is just not sustainable. Not with the same cost structure Sears had last year. If anything, retail sales will be worse in the first part of this year now that the holidays are over.

Sears Holdings Corp. (NYSE: SHLD) is laying off 300 corporate workers as it responds to the souring economy but some were in Michigan and New York City.

Since April the company has laid off nearly 6% of its corporate workforce in addition to store closings 22 stores over the past few months.

Still, there could be more to come. Barring a remarkable turnaround, the company will continue to lose market-share to companies such as Target (NYSE: TGT), Wal-Mart (NYSE: WMT) and Best Buy (NASDAQ: BBY). The economy is making Sears' problems worse but the issues run far deeper than that.

If the stock price continues to sag and the returns on equity continue to be abysmal. Chairman Eddie Lampert could take drastic measures to salvage his investment. Remember: He's a hedge fund manager not a retailer. With the stock currently trading at about one-half its book value, he has to pondering his options.

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

• Acuity Brands Inc. (NYSE: AYI) reported lower Q1 earnings that still beat analysts' expectations.
• Bed Bath & Beyond Inc. (NASDAQ: BBBY) reported unimpressive Q3 results but shares rose anyway.
• Chevron Corp. (NYSE: CVX) warned of lower Q4 earnings due to lower oil prices and narrow margins.
• Constellation Brands Inc. (NYSE: STZ) Q3 earnings tumbled on on restructuring costs and weaker sales.
• Family Dollar Stores Inc. (NYSE: FDO) topped Q1 earnings expectations as consumers seek bargains.
• Intel Corp. (NASDAQ: INTC) lowered its Q4 revenue guidance once more due to lower demand.
• LDK Solar Co. (NYSE: LDK) cut its Q4 revenue outlook as clients asked for delayed shipments.
• Manitowoc Co. (NYSE: MTW) said profit will likely come in at the low end of its previous guidance range.
• Monsanto Co. (NYSE: MON) reported strong Q1 numbers and raised its full-year guidance.
• Neogen Corp. (NASDAQ: NEOG) posted its 63rd-consecutive profitable quarter, helped by an acquisition.
• Rocky Mountain Chocolate Factory (NASDAQ: RMCF) posted dismal Q3 numbers on economic downturn.
• Sears Holdings Corp. (NASDAQ: SHLD) higher-than-expected December sales prompted raised guidance.
• Supervalu Inc. (NYSE: SVU) reported a Q3 loss because of hefty one-time charges, but topped estimates.
• Walmart Stores Inc. (NYSE: WMT) cut its Q4 forecast after lower-than-expected December sales.
• Williams-Sonoma Inc. (NYSE: WSM) forecast lower-than-expected Q4 earnings on weak December sales.

For more earnings highlights, see Time Warner, Satyam, Google, KB Home, Mosaic and others

Upcoming earnings releases include Alcoa Inc. (NYSE: AA), Infosys (NASDAQ: INFY), Linear Technologies (NASDAQ: LLTC) , Xilinx (NASDAQ: XLNX), Genentech (NYSE: DNA), Intel (NASDAQ: INTC), Marshall & Ilsley (NYSE: MI), Sealy (NYSE: ZZ), Johnson Controls (NYSE: JCI).

Visit AOL Money & Finance for more earnings coverage.

Now that the holidays are over, the big names in retail who had a tough fourth quarter are going to have to make big cuts. Based on early numbers, some of these retailers would include Sears (NASDAQ: SHLD) and Gap (NYSE: GPS). One operation that was hoping to have at least a modestly good season was Macy's (NYSE: M), but now It looks like that did not work out.

If Macy's has to close stores and restructure, it probably means that most operators who cater to the mid-priced range of buyers are in trouble. It looks like offering sharp discounts on inventory may not have been nearly enough to help them.

According to Reuters, "Macy's Inc is expected to announce as soon as Thursday it will close 10 locations." Since investors don't know which Macy's store will close and how large they are, it is impossible to know the exact impact the moves will have in terms of cost savings.

By some estimates, retail store closings will hit over 70,000 in the first half of the year.

The guys who did not make money in the fourth quarter will start shuttering before the end of this month.

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