Critics of the company blame its recent weakness to the company not having invested in remodeling its stores and to improve its customer services.

It is easy to understand where the critics are coming from. Walking into a Sears or K-Mart store just does not have the same feeling as you get when you enter into a Wal-Mart or Target store. Wal-Mart and Target understand that customers want a certain “feel” from their stores, and they deliver. Walking into a Sears and you get the feeling that the store has been there for 25 years without change (and in most cases you would be right).

The typically busy holiday shopping season was dismal for the company, and for the quarter-to-date, K-Mart stores have seen a drop in same store sales of 4.2%, while Sears stores have seen a drop of 6%.

The company stated that it had not yet decided which K-Mart and Sears stores would be closed, but that it would make the list public on its media website once the final list had been determined. It also stated that it was not sure at this point whether or not the store closings would lead to job cuts, but it is hard to imagine that the closing of 100+ stores would not lead to job cuts.

If Sears is able to absorb the criticism it has been given, and puts its focus on remodeling and vamping up its customer service then it may have a chance to get back to its glory days, but unless it is able to make serious changes, and make the quickly, then it is hard to imagine the retailer ever getting back on the same level as its major competitors.

Wall Street reacted as expected to the news, with the stock closing the session down 27.2%, down $12.47 to $33.38.

The following video on the subject is from MarketWatch:

Netflix reported its third quarter results last night, which were actually above analyst estimates, but shares are tradign down over 35% in premarket trading as investors react to news of such a massive drop in the company’s subscribers, its first in years.

Earnings for the quarter were $1.16 per share, on revenues of $822 million. Analysts had been expecting to see the company report earnings of $0.96 per share, on revenues of $812.5 million.

Typically when a company reports such strong earnings and revenues its stock trades sharply higher, but investors feel as though the subscriber drop that Netflix saw during the quarter may not be over just yet. Netflix has historically been very good at understanding what its customers want, and that is the reason why it became the leader in DVD rental and streaming video, but a couple big blunders earlier this year have left its subscribers, and investors scratching their heads and wondering if Netflix has lost its ability to stay ahead of the curve when it comes to giving its subscribers what they want.

Netflix’s first big mistake was to raise its monthly fees. While this did result in a new record for revenues, the company paid for that with few subscribers, and in its highly competitive insdustry, subcriber numbers are the key to success. Following the decision to raise its rates, it made an even more dramatic blunder in its decision to split its streaming and DVD rental business. It later changed its mind and reversed the decision to split to the 2 businesses, but the impact the decision had on its customers was not so easy to reverse.

Has Netflix lost touch with its customers? It definitely did earlier this year, and while it has tried to correct its mistakes, you have to wonder if / when the next big mistake will come from the company’s management. Netflix still has a solid business model, but once a company loses its customers confidence, it is very hard to regain it, and we will just have to see if Netflix is able to get back on track, or if customers will continue to look for other ways to get their streaming media.

The stock is down 37%, or $44.00 in premarket trading to $74.77

Going into this afternoon’s earnings report, Apple was expected to report earnings of $7.38 per share, but actual earnings came in well below what analysts were expecting to see at just $7.02 per share. Revenues were also lower than expected at $28.3 billion, which do represent a 39 percent jump year over year, but below the $29.4 billion that analysts had been expecting to see.

One of the company’s strongest product lines is the iPhone, which was weak during its fiscal fourth quarter. With the new iPhone 4 release just around the corner, iPhone buys put off buying a new phone until this month when the 4S became available. Apple sold just 17.1 million iPhones during the quarter, down from 20.3 million during the previous quarter.

On a brighter note, Apple did issue better than expected first quarter earnings forecast. Apple typically low-balls its forward guidance while analysts forecast higher earnings, but not this time. Apple forecast that it would report first quarter earnings of $9.30 on revenues of $37 billion. Analyst have previously forecast that the company will have Q1 earnings of $9 per share on $36.7 billion in revenues.

After hours traders are selling off the stock pretty sharply, pushing shares down 6.6% to $396.80, down $27.86.

Going into this afternoon’s earnings report, analysts had been expecting to see Alcoa post earnings of $0.22 per share, but were disappointed to see earnings come in under expectations at $0.15 per share.

Despite missing its earnings estimate, the company was able to post better than expected revenues for the quarter of $6.4 billion, above the $6.2 billion that analysts had been expecting to see.

Alcoa’s CEO, Klaus Kleinfeld, blamed the lower than expected earnings numbers on falling aluminum prices, and uncertainty in Europe, which resulted in a tough environment for the company. Despite the lower than expected earnings, the company did maintain its growth forecast for the remainder of the year.

Since Alcoa is the first major company to report earnings, and since it makes aluminum for a wide variety of industries, it is viewed as a bellwether stock, and investors tend to place a lot of importance on its earnings reports. Just because Alcoa disappointed this afternoon does not necessarily mean that the rest of the earnings season is going to be weak, but it definitely does not paint a pretty picture either. We will get a better idea of what to expect during the remainder of the earnings season later this week with JP Morgan and Google report their quarterly numbers.

The stock was up a little over 2% in today’s session, but has dropped 4.2% in after hours trading.

Going into last night’s first quarter earnings report, analysts had been expecting to see Alcoa report earnings of $0.27 per share, on revenues of $6.3 billion.

Alcoa kicked off the earnings season by posting better than expected earnings of $0.28 per share, but revenues disappointed at just $6 billion.

The company reaffirmed its view of global aluminum demand in 2011 of 12%.

The stock is trading down 4.3% in premarket trading.

The cancellations come after a flight was forced to make an emergency landing on Friday after a 5 foot long hole ripped open the passenger roof of a Southwest plane flying from Phoenix to Sacramento.

Luckily, no one was hurt in Friday’s incidents, but Southwest grounded 70 other jets and immediately starting inspecting the planes to make sure similar problems were not present in the remainder of the jets in its fleet.

Over the weekend Southwest canceled 600 flights, and then another 70 flight cancellations were announced today.

So far in the inspection process the company has found surface cracks in three more of its planes. 19 other planes have been through the inspection process and were found to be sage for travel, and the remainder of the planes will be inspected on Tuesday.

As we noted yesterday in our CarMax earnings preview, analysts were expecting to see the company post fourth quarter earnings this morning of $0.38 per share. Earnings were higher than expected, at $).39 per share, marking the 9th straight quarter of analyst beating earnings for the company.

During the same period last year CarMax had earnings of $0.33 per share.

Revenues were also above estimates at $2.25 billion, versus analyst estimates for $21.8 billion.

Despite topping earnings and revenues estimates, the stock is trading sharply lower in today’s action. The reason the stock is selling off was a drop in gross margin during the quarter to 14.2% from a previous 14.5%.

Same store sales were up 12% during the period.

The stock is trading down 7.3% on the day to $32.06, down $2.53.

Going into this morning’s earnings report, analysts had been expecting to see Apollo Group report earnings of $0.69 for its fiscal second quarter. Adjusted earnings were higher than estimates at $0.84 per share, but actual results showed a loss of $0.45 per share.

The primary reason why the company had such a big loss was due to a drop in new student enrollments.

Apollo is the parent company for Pheonix University, and it is working hard to attract new students to its program. In order to attract new students, the company has been allowing students to try out their programs for free before deciding if they want to join the program full time.

In addition to allowing students a trial period, Apollo is also investing heavily into marketing itself which is also weighing on the company’s bottom line. The amount that Apollo pays to put a new student into its program has doubled over the past year to $3,200 .

Looking ahead to its full year 2011 results, Apollo now expects to see net revenue in a range of $4.65 billion to $4.75 billion. Analysts have previous forecast full year revenues of $4.69 billion.

The stock is trading down 10.2% in premarket trading.

According to the Commerce Department this morning, September sales of new homes dropped by 3.6%. September’s annual rate was 402,000 units, which was below the expected 440,000 annual units.

The average price for a new home was also lower, falling 9.1 percent on a year-over-year basis to $204,800. On the bright side, that is up 2.5 percent from August.

The housing market has been rebounding a bit lately, but things could turn around quickly should the current $8,000 tax incentive expire at the end of next month. It has been given credit for helping boost sales, but analysts are worried what will happen if Congress does not extend the program.

The DOW closed the session down 0.67%, the NASDAQ ended the day down 0.76%, while the S&P slipped by 0.8%.

General Electric started off the day off on a bad note when the company reported revenues that came up short of analyst estimates. GE was able to outpace analyst estimates for its earnings in the third quarter by posting 23 cents per share verse analyst estimates of 20 cents per share, but that was not enough to outweigh its missed revenues. The company reported $37.8 billion in revenues verse analyst estimates for $40.3 billion. Shares of GE closed the day down 4.2% to $16.08, down $0.71 on the day and wiping out $7.5 billion in market capitalization.

Bank of America was expected to show a loss for its third quarter of 21 cents per share, but the actual numbers came in worse than expected with a 26 cent loss in the quarter. The stock was hit hard today following the report, with shares falling 4.6% to $17.26, down $0.84 on the day.

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New 52 Week Highs:

There were several big name stocks that were able to set new 52 week highs today, despite the down market and include the following; Pfizer (NYSE: PFE), Halliburton (NYSE: HAL), Hewlett-Packard (NYSE: HPQ), and Mattel (NYSE: MAT).

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Analyst upgrades and downgrades:

Stocks upgraded today include:

• Gap Inc. (NYSE: GPS) upgraded by Caris to Buy from Above Average with $27 price target
• Safeway (NYSE: SWY) upgraded by Kevin Dann to Buy from Neutral and boosted its price target on the stock to $27 from $19 per share.
• Google (NASDAQ: GOOG) received an upgrade today by Benchmark Co. to a Buy from Hold, while lifting its price target on the stock to $625 from $500.

Stocks downgraded today include:

• Netflix (NASDAQ: NFLX) downgraded by Caris to Above Average from Buy with a $56 price target on the stock.
• Nokia (NYSE: NOK) downgraded by Gabelli to Hold from Buy.