The White House says the war is not over, and Pentagon officials are urging caution, but Wednesday effectively marked the end of Operation Iraqi Freedom as far as Wall Street is concerned.

After months of focusing on Iraq and weeks of trading in lock step with allied forces, the time has come for Wall Street to get back to basics. In many regards, a shifting of traders' focus to economic data and prospects for corporate earnings were responsible for

Wednesday's setback. Barring dramatic developments in and around Iraq, such fundamental issues are likely to resume prominence going forward.

On Thursday, for example, traders will likely focus on weekly jobless claims data and/or the report on February's trade balance. Additionally, markets will react to news after the close Wednesday from



, which was largely positive. Yahoo!

posted better-than-expected quarterly earnings, reversing a loss in the year-earlier period, and, more important, raised its guidance for the remainder of 2003.

On the flip side,


( DNA) shares were down in after-hours trading late Wednesday as the firm's revenue fell shy of estimates even though its

earnings bested expectations.

Another 18 or so firms are slated to post quarterly results Thursday, including

Network Associates

( NET),

Pier 1 Imports

(PIR) - Get Report


First Data

(FDC) - Get Report


Company-specific news will become increasingly important as earnings seasons heats up in the coming weeks. Market participants will get back to the fundamental work of analyzing results, listening to conference calls, digging through financial filings and reviewing balance sheets -- again, assuming no unexpected developments on the geopolitical front.

For those already taking that step back to "normalcy," here are some names to ponder from a firm that never stopped doing the blocking and tackling.

Last Friday, Gimme Credit, an independent bond-rating firm, released its Top 10 list of favorite finance credits, including: First Data,


(ATH) - Get Report


Bank of America

(BAC) - Get Report


Bear Stearns

( BSC),

BMO Financial Group

(BMO) - Get Report


Equity Office Properties

( EOP),

Goldman Sachs

(GS) - Get Report


National City

( NCC),

Travelers Property & Casualty

( TPK) and

U.S. Bancorp

(USB) - Get Report


"Our current recommendation list includes credits we view as defensive, with some upside potential if the economy rebounds," said Gimme Credit's report, which I obtained Wednesday and posted in's

Columnist Conversation. (Membership has its privileges.)

The list should be of particular interest for those focused on corporate bonds and, by extension, those interested in shares. Developments in corporate bonds often presage those in stocks, as fixed-income investors generally react to fundamental developments long before their equity counterparts.

The list should not, however, be used in isolation or as a precise market-timing tool for equity traders. Often there is a lag between what independent firms such as Gimme Credit say and mainstream bond-rating agencies such as Standard & Poor's and Moody's Investors Service, which often then trigger a reaction in the general investing populace.

Furthermore, some observers took umbrage with Gimme Credit's specific recommendations.

"Anthem shouldn't be a top 10 credit," suggested Arne Alsin, founder and principal of Alsin Capital Management and a

contributor. The Blue Cross/Blue Shield operator's "balance sheet is heavy with intangibles, debt roughly equals tangible assets" and its share float has grown as the firm used its "richly valued equity" to make acquisitions.

Alsin didn't object to any of the others on the list, and Kathy Shanley, Gimme Credit's financial analyst, couldn't be reached for further comment. To reiterate, Gimme Credit's recommendations (like everybody else's) should be viewed as a starting point, not an end game.

Bottom-Picking, Bond-Style

Furthermore, Gimme Credit has had more success over the years with its "Bottom 10" lists, which flagged blowups at firms such as


TheStreet Recommends

long before equity markets awoke to the grim reality.

"Of the 20 companies appearing on our Bottom 10 lists during the past year, 15 have subsequently been downgraded," Gimme Credit's Carol Levenson wrote on March 10. "Of these 15, two are in default (WorldCom and

NRG Energy

(NRZ) - Get Report

), one is C-rated (



) and eight were downgraded to junk" by major bond-rating firms. (Notably, Levenson conceded in


on Feb. 11 that she wasn't bearish soon enough on



That March 10 list included


(HRC) - Get Report

, whose shares were recently suspended, as well as

Tenet Healthcare

(THC) - Get Report


Valero Energy

(VLO) - Get Report

, both down sharply since mid-March.

The list also includes names of debt issuers whose shares have rallied in the past month, sharply in some cases, including


(S) - Get Report





Those gains reflect the fact Gimme Credit's analysts aren't infallible. Then again, who is? It also reflects the market's changed nature.

"Like any good credit analysts,

Levenson and Shanley are commenting on the claims-paying ability of company," observed Brad Ruderman, managing partner at Ruderman Capital Management, a Los Angeles-based hedge fund with about $140 million under management. "Of course, in the bubble, this proved to be a fairly reliable indicator of over-levered equities. Now that default rates are trending down, I believe the usefulness of their work in trading equities is diminished."

For example, bonds issued by





(WMB) - Get Report



(AES) - Get Report

are all "way below par," Ruderman noted. "Yet, if you shorted these stocks lately, you'd be bloodied." (Ruderman Capital is long Calpine and AES.)

Of course, recent pain for anyone shorting those names came after extended declines for all three stocks, which their respective bonds experienced first.

Finally, the last time Gimme Credit issued a Bottom 10 list for financial names was on Dec. 13, which included


( ACF) and



, whose shares have both tumbled since mid-December, as well as

MGIC Investment

(MTG) - Get Report


Radian Group

(RDN) - Get Report

, which are down more than the


2.6% decline in the same period.

Some of the other names on that list have since risen, again indicating why applying such calls directly and immediately to equities isn't advisable. At the risk of repeating myself: I'm not advising it, just giving a "heads-up" to those ready to move beyond Iraq.

Aaron L. Task writes daily for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

Aaron L. Task.