As if pouring salt on a wound, Moody's came out today and cut the rating of luxury home builder Toll Brothers (NYSE: TOL) to junk status. Their rating was cut to Ba1 from Baa3.

As reported in a Bloomberg report, Moody's said: " While the company is one of the only remaining home builders that is currently generating earnings before impairment charges, Moody's does not expect this to continue, as falling prices and lower absorption rates continue to impact margins."

Toll Brothers CEO Robert Toll has recently told the market that he thinks that real estate is still in a downward spiral. It seems that Moody's agrees. While this all maybe true, for long term investors, shares in Toll Brothers are certainly intriguing under $19. Long term, contrarian inclined investors may want to do a bit of research as the shares maybe approaching levels that are hard to refuse.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/3/08.

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

• Big Lots Inc. (NYSE: BIG) beat Q1 expectations and offered Q2 and full-year earnings guidance.
• Brown-Forman Corp. (NYSE: BF.B) beat Q4 estimates on demand for Jack Daniels and Finlandia vodka.
• Collective Brands Inc. (NYSE: PSS) reported strong Q1 results despite a litigation charge.
• Del Monte Foods Co. (NYSE: DLM) Q4 earnings surged 37% but fell short of analysts' estimates.
• Dollar Tree Inc. (NASDAQ: DLTR) beat Q1 earnings expectations and offered Q2 and full-year guidance.
• Dr Pepper Snapple Group Inc. (NYSE: DPS) Q1 earnings surged 38% but fell short of expectations.
• Guess Inc. (NYSE: GES) reported strong Q1 results on strength in Europe and Asia.
• National Semiconductor Corp. (NASDAQ: NSM) posted better-than-expected Q4 results.
• Nucor Corp. (NYSE: NUE) raised its earnings outlook for the coming Q2 report, sending shares higher.
• SeaChange International Inc. (NASDAQ: SEAC) reported better-than-expected Q1 results.
• Smithfield Foods Corp. (NYSE: SFD) Q1 profits fell 94% on rising grain costs and falling hog prices.
• Toll Brothers Inc. (NYSE: TOL) reported a smaller-than-expected Q2 loss, lifting shares.
• Wimm-Bill-Dann Foods (NYSE: WBD) reported strong Q1 results that beat Wall Street expectations.

See also: Earnings highlights: Wal-Mart, Lehman Bros., Take-Two, Ciena, Trina Solar and others

Also, continued real estate losses are expected to hurt the quarterly reports of banks such as like Wachovia (NYSE: WB), Wells Fargo (NYSE: WFC), and National City (NYSE: NCC). And Steven Mallas wonders why Playboy (NYSE: PLA) shares have tanked since its last earnings report.

Upcoming results to watch for include Krispy Kreme (NYSE: KKD), Pall Corp. (NYSE: PLL), Pep Boys (NYSE: PBY), Korn Ferry (NYSE: KFY), and Casey's General Stores (NASDAQ: CASY).

Visit AOL Money & Finance for more earnings coverage.

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After hitting a one-year high of $29.15 last June, the stock hit a one-year low of $15.49 in January. TOL opened this morning at $21.39. So far today the stock has hit a low of $21.10 and a high of $21.98. As of 12:30, TOL is trading at $21.77, up $0.81 (3.9%). The chart for TOL looks bullish and deteriorating, while S&P gives the stock a bullish 4 Stars (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $15 range. A bull-put credit spread is an options position that combines the purchase and sale of put 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 6.4% return in just three and a half months as long as TOL is above $17.50 at September expiration. Toll Brothers would have to fall by more than 31% before we would start to lose money. Learn more about this type of trade here.

TOL hasn't been below $15 at all in the past year and has shown support around $20 recently. This trade could be risky if the housing market falls even farther in the coming months, but even if that happens, that position could be protected by support the stock might find around $19, where it bottomed out in March.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in TOL.

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Toll Brothers (NYSE:TOL) is up 2% on earnings.

Thornburg (NYSE:TMA) is down 11% on news it will delay filing earnings.

Lehman (NYSE:LEH) is off 2% on news it may have to raise more money.

Mitcham (NASDAQ:MIND) is down 9% on a quarterly loss.

Shares may trade differently is the pre-market than they do in the regular session.

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

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Here's a peek at what analysts surveyed by Thomson Financial are expecting from companies scheduled to report quarterly results in the first week of June, 2008.

The following companies are expected to post earnings growth, compared to the same period in the previous year:

• Take-Two Interactive (NASDAQ: TTWO) up 136.6% (from a loss) to $1.12 per share, on $499.1 million in revenue
• Lululemon Athletica Inc. (NASDAQ: LULU) up 58.3% to 12 cents per share, on $71.8 million in revenue
• Vimpelcom Communications (NYSE: VIP) up 54.2% to 59 cents per share, on $2.1 billion in revenue
• Focus Media Ltd. (NASDAQ: FMCN) up 36.4% to 33 cents per share, on $161.3 million in revenue
• Ciena Corp. (NASDAQ: CIEN) up 29.7% to 37 cents per share, on $238.4 million in revenue
• Greif Inc. (NYSE: GEF) up 24.1% to 87 cents per share, on $839.9 million in revenue
• Vail Resorts Inc. (NYSE: MTN) up 18.4% to $2.44 per share, on $474.8 million in revenue
• Guess? Inc. (NYSE: GES) up 17.4% to 46 cents per share, on $451.6 million in revenue
• Del Monte Foods Co. (NYSE: DLM) up 15.4% to 26 cents per share, on $1.0 billion in revenue
• Cooper Companies Inc. (NYSE: COO) up 14.6% to 48 cents per share, on $256.7 million in revenue
• Jackson Hewitt Tax Service Inc. (NYSE: JTX) up 1.9% to $2.08 per share, on $161.6 million in revenue

These companies are expected to report declines in earnings:

• Collective Brands Inc. (NYSE: PSS) down 1.7% to 58 cents per share, on $935.9 million in revenue
• National Semiconductor Corp. (NYSE: NSM) down 3.6% to 27 cents per share, on $449.5 million in revenue
• Midas Group Inc. (NYSE: MDS) down 4.0% to 24 cents per share, on $48.9 million in revenue
• Bob Evans Farms Inc. (NASDAQ: BOBE) down 4.7% to 40 cents per share, on $441.5 million in revenue
• Comtech Telecommunications (NASDAQ: CMTL) down 21.1% to 56 cents per share, on $129.5 million in revenue
• Rex Stores Corp. (NYSE: RSC) down 50.9% to .25 cents per share, on $57.0 million in revenue
• Smithfield Foods Inc. (NYSE: SFD) down 82.4% to 6 cents per share, on $3.5 billion in revenue
• Williams-Sonoma Inc. (NYSE: WSM) down 93.8% to 1 cent per share, on $778.8 million in revenue

And these companies are expected to report losses:

• Hovnanian Enterprises Inc. (NYSE: HOV) $2.68 per share, on $778.8 million in revenue
• Amerco (NASDAQ: UHAL) $1.15 per share, on $485.5 million in revenue
• Toll Brothers Inc. (NYSE: TOL) 86 cents per share, on $808.9 million in revenue
• IDT Corp. (NYSE: IDT) 28 cents per share, on $470.5 million in revenue
• Plato Learning Inc. (NASDAQ: TUTR) 18 cents per share, on $16.3 million in revenue

For a more thorough look at what to expect from the results of some of these companies, check out Andrew Horowitz's The week in preview: No place like home.

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How did we get here anyway? Housing and construction companies have been crushed as the bubble burst and now investors have to make a critical decision. Do you stay and hope for a recovery or bag it and move to another position that has the potential to provide better returns?

The problem is simple to explain: Most investors hate taking a loss. In fact, most investors will look to get "even" before they sell and this attitude usually leads to greater losses, anxiety and poor decisions. The truth is that much of this can be avoided with proper risk management techniques. If any of this describes you, then consider developing a plan for risk management and a discipline that will help to protect your hard earned principal. Now, more than ever, investors need a plan. We all need a plan that includes well developed risk management disciplines, which is why I dedicate a full chapter to it in my book, The Disciplined Investor.

Monday, June 2

The week begins with the 10 am release of construction spending and the ISM Index. Construction spending is expected to continue to be weak as is the ISM.

Then we have a few housing-related earnings releases that should be of interest. Watch NCI Building Systems Inc. (NYSE: NCS). This company is engaged in manufacturing and marketing of metal products for the nonresidential construction industry. Terrific! This is a company that is suffering along with the entire construction sector...that is for sure. In fact, they company lowered the outlook for the remainder of the year back in March. It stands to reason that not much is better. The ace in the hole is the recent trend of lowering expectations and then coming out with an earnings beat. Even so, this has too much potential for problems and the sideline is a good vantage point to watch the earnings announcement, which is expected to come in with a PROFIT of 31 cents per share on $365 million of revenue. (Uh...That I would like to see.)

Thornburg Mortgage (NYSE: TMA) is still hanging in there. But the losses are mounting. Analysts are expecting a loss of $3.38 per share of this quarter. They are also figuring on revenues to implode and the company to see a $591 revenue shortfall. Ouch! There is good news though. It could be worse, it could always be worse. (Note: This report was delayed since May 15th.)

Tuesday, June 3

New home sales are supposedly on the rise. April saw a rise to 526,000 new sales, up from 509,000 in March. This translates to a 3.3% increase, most of which came from the Western part of the country. The most probable explanation is a simple blip in the trend that can be written off to seasonality or other statistical foible. Housing is still a problem, as the evidence of continued deterioration can be seen everywhere. Specifically, this is showing up as a massive increase in foreclosures, but more importantly, it is not only due to the fact of the problems with the homeowner, but the problems with getting the banks and lenders to agree to finance the sale. Remember, there is still a whopping 10 months of supply on the market. If you are interested, next week, The Disciplined Investor Podcast will examine this and other economic vexings as Michael "Mish" Sedlock and CNBC's Steve Leisman*join in the conversation.

And now back to earnings: Reading the above may not make Toll Brothers (NYSE: TOL) look too appealing. The truth is that of all of the builders, this is one of the few that many had believed would be weather the storm as most of the homes are the geared for the ultra-affluent. Even so, the housing and credit storm is getting everyone wet. There does not seem to be a way to walk between the raindrops with this one. If the phrase "no desert until you eat all of your dinner" ever meant anything, then builders need to slow down and sell their inventory before thinking about breaking any new ground. First Call is looking for a loss of 87 cents per share for the period. As a point of reference, last year TOL earned 22 cents for the same period.

If there is ever a time that we as investors need to learn from our mistakes, now is the time. Run right over to Plato Learning (NASDAQ: TUTR) and take a test! While on the subject of test, the shares have been testing the nerves of investors, testing new lows and testing another breakdown. Volume is anemic and otherwise there is nothing exciting here. Estimates are for a loss of 18 cents a share on $16 million of revenue.

After the close, homebuilder Hovnanian (NYSE: HOV) is reporting. You know what I always say: Builders are like puppy dogs. Puppies will eat and eat until they throw up. Builders build and build until they are bankrupt. Maybe that is a little harsh. Puppies, please accept my humble apologies. HOV is expected to have earnings come in at -$2.64 per share for the quarter on revenue of $759 million. The tide will turn, eventually.

Wednesday, June 4

If you can't stand the heat, get out of the kitchen, and go right to Williams-Sonoma (NYSE: WSM). Admit it! You love that place. The tastings, the pots and pans, the glassware. Maybe it is just me...uhhh, is it? Well, even though this is a great place for housewares and kitchen items, you just have to wonder if this is going to survive the slowdown. Honestly, would you want to be WSM management right now? You have a consumer that is, at best, fickle, credit problems, and Wal-Mart (NYSE: WMT) beating your pants off. Shares could get cooked if earnings miss the expected 1 cent per share that analysts are predicting. Downside risk is toward $22 per share, the first level support.

If I were to live in a box, I would probably have one made by Greif Brothers (NYSE: GEF). This stock has been a great performer and is primed to breakout. Greif manufacturer of industrial packaging products such as steel, fiber, and plastic drums; intermediate bulk containers; closure systems for industrial packaging products; and polycarbonate water bottles, which are complemented with a variety of value-added services, including blending, packaging, logistics, and warehousing. Earnings growth has been outstanding, the industry group has been solid and the fundamentals look strong. If we are seeing a global move that has commodity prices escalating, the value of the timberland that GEF owns in should grow as will the need for containers to ship products around the world. Low debt, 5% net margins and a chart showing a move above the 200- and 50-day average is getting me very interested. Add 2.5 million shares short (9 days to cover) and you have a something to take a close look at. First Call estimates 87 cents per share on $839 million of revenue.

Thursday, June 05

Trina Solar (NYSE: TSL) is due to report. Yes SOLAR! How sick of that word are you? I am just looking for the day that the reports come out about how solar energy is bad and causes some bizarre disease. You know it is going to happen, it always does. TSL is hot as is the entire sector, but has been breaking down of late. Expectations are very high for all of the stocks in this sector, so be careful. Earnings are expected to come in at 48 cents per share on $116 million of revenue.

If you want to know where someone lives, their background and even their phone number, InfoUSA (NASDAQ: IUSA) may be your first stop. This is a company that sells mailing lists, leads and your phone number to those annoying salespeople that have a knack for interrupting dinner. I have been harassed of late on my cell phone from a company that supposedly wants to help me renew my car warranty. Can you say scam? (BTW, if you want to learn more about investment scams, check out the latest MoneyGirl Podcast episode.) But I digress. How about this idea: Boycott the stock to show them that you are sick of it and not going to take it anymore! Stop the madness, stop the annoying calls! Earnings are supposed to come in at 17 cents per share on $173 million of revenue. Oh, one long shot idea...this is a prime takeover candidate for a company looking to gain ad revenue and grow online ad revenue. Any come to mind?

Friday, June 6

Economic releases are what it is all about today. Hourly earnings, nonfarm payrolls, unemployment, and consumer credit will be in the spotlight. FUN, FUN, FUN! Maybe it will be better to take the day off!

- -

Disclosure: Horowitz & Company clients hold positions in some stocks mentioned as of the publish date.

Andrew Horowitz is a money manager and author of The Disciplined Investor: Essential Strategies for Success. Now available on audiobook!

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• Don't Buy This Housing Report
• Consumers Lower Expectations on HELOCs

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

• Applied Materials Inc. (NASDAQ: AMAT) Q2 profits declined on a glut of flash memory chips.
• Bally Technologies Inc. (NYSE: BYI) beat Q3 expectations and offered full-year guidance.
• Barclay's (NYSE: BCS) reported a big Q1 loss on credit-related write-downs.
• Constant Contact Inc. (NASDAQ: CTCT) saw big increases in Q1 revenues and in its customer base.
• Deere & Co. (NYSE: DE) Q2 profits rose on international demand, but results just missed estimates.
• Fluor Corp.'s (NYSE: FLR) strong Q1 results are a signal for the energy sector, says Jim Cramer.
• Freddie Mac (NYSE: FRE) Q1 loss widened on the housing slump, but not as much as forecast.
• IndyMac Bancorp Inc. (NYSE: IMB) narrowed its loss but predicted it wouldn't see a profit in 2008.
• LDK Solar Co. Ltd. (NYSE: LDK) Q1 earnings topped forecasts and it raised its outlook.
• MBIA Inc. (NYSE: MBI) reported a larger-than-expected Q1 loss due to write-downs.
• Mindray Medical International Ltd. (NYSE: MR) beat Q1 expectations and raised its full-year guidance.
• Nuance Communications Inc. (NASDAQ: NUAN) Q2 earnings were in line with analysts' expectations.
• ON Semiconductor Corp. (NASDAQ: ONNN) beat Q1 expectations and raised its Q2 revenue forecast.
• RealNetworks Inc. (NASDAQ: RNWK) beat Q1 estimates and announced share buybacks and a spin off.
• Salary.com Inc. (NASDAQ: SLRY) missed Q1 forecasts, leading to analysts' downgrades.
• Sykes Enterprises Inc. (NASDAQ: SYKE) beat Q1 estimates and raised its Q2 and full-year forecast.
• Syniverse Holdings Inc. (NYSE: SVR) beat Q1 expectations on strength in "messaging and mobil data."
• Toll Brothers Inc. (NYSE: TOL) warned of lower Q2 profits and more "challenging times" ahead.
• Website Pros Inc. (NASDAQ: WSPI) reported flat earnings despite soaring revenues and operating income.

Also, after AIG's (NYSE: AIG) dismal results, International Lease Finance Corp. wants to be spun off from its parent. Analysts see JC Penney Inc. (NYSE: JCP), Kohl's Corp. (NYSE: KSS) and the rest of the retail sector rebounding in the latter half of the year. Jim Cramer ponders some suprising responses to so-so earnings reports, and looks ahead to Lowe's (NYSE: LOW) and Home Depot (NYSE: HD) as a sign for the housing sector.

Other upcoming results to watch for include Campbell Soup (NYSE: CPB), Autozone (NYSE: AZO), Hewlett-Packard (NYSE: HPQ), Intuit (NASDAQ: INTU), Staples (NASDAQ: SPLS), Target (NYSE: TGT), Limited Brands (NYSE: LTD) The Gap (NYSE: GPS) and Barnes & Noble (NYSE: BKS).

Visit AOL Money & Finance for more earnings coverage.

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• The 5 Dumbest Things on Wall Street: May 16
• Toll CEO: Fourth Estate Razes Real Estate

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After hitting a one-year high of $31.15 almost a year ago, the stock fell much of 2007 to hit a one-year low of $15.49 in January. This morning, TOL opened at $23.25. So far today the stock has hit a low of $22.66 and a high of $23.67. As of 12:45, TOL is trading at $23.00, down $0.37 (-1.6%). The chart for TOL looks bullish and steady, 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 a June bear-call credit spread above the $27.50 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 4.2% return in six weeks as long as TOL is below $27.50 at June expiration. Toll would have to rise by more than 20% before we would start to lose money. Learn more about this type of trade here.

TOL hasn't been above $27.50 since June and has shown resistance around $25 recently. This trade could be risky if the company's earnings (due out on 6/3) are a positive surprise, but even if that happens, this position could be protected by resistance TOL might find around $25, where it topped out twice over the past two months.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in TOL.

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• Sprint Nextel Corp. (NYSE: S) to report Q1 earnings; conference call at 8:00am.
• W.W. Grainger, Inc. (NYSE: GWW) to hold sales conference call at 8:00am.
• XM Satellite Radio Holdings, Inc. (NASDAQ: XMSR) and Sirius Satellite Radio, Inc. (NASDAQ: SIRI) to report quarterly earnings; the conference call is at 10:00am for XM and at 4:30pm for Sirius.

• Wal-Mart Stores, Inc. (NYSE: WMT) to report Q1 earnings; conference call at 7:30am.
• Toll Brothers, Inc. (NYSE: TOL) to report preliminary Q2 results and outlook at 2pm.
• Applied Materials, Inc. (NASDAQ: AMAT) to report Q2 earnings; conference call at 4:30pm.

• FCC Open Commission Meeting at 9:30am.
• SEC Open Commission Meeting at 10:00am.
• Macy's, Inc. (NYSE: M) to report Q1 earnings; conference call at 10:30am.
• Agilent Technologies, Inc. (NYSE: A) to report Q2 earnings; conference call at 4:30pm.

• FERC Open Commission Meeting at 10:00am.
• Hewlett Packard Company (NYSE: HPQ) to report Q2 earnings; conference call at 5:00pm.

• PDUFA date for Salix Pharmaceuticals, Ltd. (NASDAQ: SLXP)'s Colazal for treating mild to moderate ulcerative colitis.
• Landstar System (NASDAQ: LSTR) to give mid-quarter update conference call.

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