Season's Greetings From Wal-Mart

T'was the day after Christmas and Wal-Mart ( WMT) was adding one more group to the burgeoning ranks of Americans who despise it: the large number of shoppers that tried to redeem gift cards in its stores on Dec. 26, only to be turned away due to a computer glitch.

The world's largest retailer acknowledged the problem during the post-Christmas shopping rush, when hordes of shoppers head back out to stores to redeem gift cards, exchange gifts and spend more money.

The company pinned the blame on a third-party systems provider called ValueLink, whose parent company is First Data, but this, ahem, "issue" made an already challenging retail season even harder for Wal-Mart, leaving frustrated investors to wonder, like Jack Nicholson, if this is as good as it gets.

Astonishingly, Wal-Mart, which has yet to see its shares get anywhere near the highs they set eight years ago, was only getting started.

On Monday, the retail giant announced that it closed an online movie-download service it launched less than a year ago to compete with Amazon ( AMZN) and Apple ( AAPL).

Apparently, the company -- known more for cheap prices and stingy employment practices than its online video expertise -- could not compete. But this holiday season isn't about winners or losers for Wal-Mart, and it's not about what it gets. It's about what it gives.

How much of its shareholders' cash did the world's largest retailer bury with its failed movie downloads effort anyway?

Dumb-o-meter score: 95. Unlike most things on its shelves, at least Wal-Mart's gift-card problem wasn't manufactured in China.

Off Tar-zhay

Target ( TGT) never wants to be outdone by Wal-Mart, and the No. 2 U.S. retailer had investors scratching their heads on Christmas Eve when it delivered an early stock stuffer.

Late in the afternoon after a shortened holiday trading session when most of Wall Street's bridge-and-tunnel crowd was already slurping eggnog on the bar car, Target admitted quietly that its December same-store sales may decline.

The Minneapolis-based retail chain said it now expects its December sales at stores open at least a year in the range of down 1% to up 1%. That's a far cry from its previous forecast calling for an increase of 3% to 5%.

Earlier in the month, Target had reported disappointing November results and warned that if weak sales trends continued, its December same-store sales would fall short of its forecast. The trends appear to have continued and then some, since the company said December results fell "well short of the meaningful improvement" it had earlier said was needed to achieve fourth-quarter earnings growth.

Target's weakness comes as the retail sector suffers across the board amid what may be the worst holiday shopping season since 2002 -- Wall Street's last recession year. Since the beginning of December, the S&P Retail Index has shed 7.5%. Meanwhile, shares of Target have lost 17% in that span, including a 5.6% slide since its Christmas Eve announcement.

Dumb-o-meter score: 88. Should we give Target credit that it was standing underneath the mistletoe when it gave investors this little kiss?

The Sell-Side New Year

The bursting of the U.S. credit bubble has Wall Street's credit analysts facing severe scrutiny at the moment. Their predicament is similar to that faced by Wall Street's equity analysts after the dot-com meltdown.

Luckily for stock investors, regulators prescribed toothy reforms to guard against the conflicts of interest at broker-dealer firms that both underwrite and analyze stocks ... right? Well, in 2008, sell-side equity analysts are busy upgrading their record from an "abysmal" rating to a strong "way behind the curve." Let's survey some of the sell side's collective wisdom from the first week of the year.

On Wednesday -- the first day of trading in 2008 -- Banc of America Securities downgraded chipmaker Advanced Micro Devices ( AMD) to "sell."

In 2007, shares of Advanced Micro Devices dropped 63%. Thanks for the update BofA.

Bear Stearns, fresh off its recent glory in the subprime mortgage market, kicked off the new year by downgrading Starbucks ( SBUX) to peer perform from outperform.

In 2007, shares of Starbucks dropped 42%.

JPMorgan Chase ( JPM) was next out on a limb when it downgraded FedEx ( FDX) to neutral from overweight.

In 2007, FedEx shares tumbled 19%.

For its part, UBS blew the market's mind when it downgraded oil outfit Hess ( HES) to neutral from buy, while simultaneously raising its price target on the stock to $110 from $87. No doubt, with Hess trading recently at $99.40, that 11% premium in the analyst's new price target makes it a screaming neutral.

Dumb-o-meter score: 72. Perhaps these firms were following The Wall Street Journal's lead, inspired by the paper's 2007 upgrade of Bear Stearns CEO Jimmy Cayne to "high" from "incommunicado."

Who Needs Writers?

Jay Leno, host of NBC's "The Tonight Show," is known less for his natural abilities than for his hardworking zeal -- a quality that everyone is looking for in a comedian.

Leno's work ethic, symbolized in his Wednesday night return to late night by his cleanshaven face, is probably what gives him his strong sense of solidarity with his writing staff. Like the vast majority of TV and film scribes in Hollywood and Manhattan, Leno's writing staff remains entrenched in a labor strike that has crippled the entertainment industry and reduced media valuations on Wall Street going into the new year.

On his first broadcast in 2008, Leno took a break from his improvised hilarity by noting soberly that he sided with his network's top brass and crossed the picket lines because the strike of 19 writers on his staff would put 160 employees out of work.

We haven't seen this level of courage in broadcasting since Dan Rather, the former CBS ( CBS) anchorman, in a lawsuit filed years after the fact, accused his onetime employer of kowtowing to the Bush administration by forcing him to apologize on the air for his botched reporting.

Speaking of CBS, Leno's counterpart on that network, David Letterman, also returned from a two-month siesta with his writing staff intact. He owns his show and was able to negotiate an agreement with the union.

For his part, Letterman showed detachment from the writers' cause by sporting a grizzly white beard and devoting much of his show to blatant criticism of the studios. His return to the airwaves included a clip from 2008 presidential candidate Hillary Clinton as well as a visit from actor Robin Williams, who was recently marching on the picket lines himself.

Perhaps most cynically, Letterman did his traditional top 10 list by inviting striking writers from competing late-night shows, like "The Daily Show with Jon Stewart" and "The Colbert Report," to deliver a mock list of the writers' demands, like "Producers must immediately remove their heads from their asses!"

Leno, meanwhile, hosted 2008 presidential candidate Mike Huckabee, who told reporters beforehand that he supported the writers and he didn't realize his appearance on the show would amount to crossing the picket lines.

Leno's soon-to-be successor, Conan O'Brien, looked more like Letterman in his return broadcast with a beard of his own. His show, which followed Leno's, eschewed A-list guests in favor of an ongoing joke about his writerless state. Audiences were left wondering: When Leno is gone, will joke writers ever get the respect they deserve?

Dumb-o-meter score: 65. Perhaps there's something to be said for the networks showing pride. Oh, wait, see no. 5.

CNBC: Dumbest TV Network of 2007

Agree or disagree with Time magazine, one thing seemed clear when it announced its choice of Russian President Vladimir Putin as "Person of the Year" in 2007: the magazine industry recovered some measure of self-respect. Perhaps CNBC will take note and try to regain its pride a year from now.

You'll recall that last year, Time Warner's ( TWX) publishing icon inexplicably picked "You" as its "Person of the Year," and reading the magazine was like driving by the scene of a gruesome highway accident.

"You" was more marketing than journalism, more a desperate plea than thoughtful or useful information. It was a lame attempt by the magazine to grab a seat on the digital revolution's bandwagon, flatter the egos of its dwindling audience and shed its "dead tree" image as the grandparent's guide to current events. Rather than achieve these aims, the magazine only reinforced its predicament and further damaged its own brand by sullying an annual tradition that still interests the general public.

All this brings us to the end of 2007, when audiences on Wall Street were subjected to CNBC anchor Maria Bartiromo's typically breathless declaration that "America's Business Channel" disagrees with Time's choice.

Instead of choosing a real person, General Electric's ( GE) business cable network opted to ape Time's ill-fated 2006 effort when it chose "The American Homeowner" as its own alternative "Person of the Year," in honor of the many struggling mortgage holders whose homes are declining in value and perhaps approaching foreclosure due to the bursting of the U.S. credit bubble. This, despite the fact that Bartiromo and her CNBC counterparts shrugged off the developing mortgage crisis as nonexistent for years.

Just as Time faced a looming threat from the rise of the Internet, CNBC faces its own threat from News Corp. ( NWS), which has the cable network in its sights with the recent launch of the Fox Business Network and the bold acquisition of The Wall Street Journal. Fox's new network has taken pains to steer clear of the Wall Street jargon found regularly on CNBC in an effort appeal to business-minded audiences in America's heartland -- the sort of people CNBC tried to appeal to with its own ridiculous choice for "Person of the Year."

Dumb-o-meter score: 54. In other words, Murdoch is trying to beat Wall Street's handmaiden by going straight to the audience that it largely failed to serve -- the American homeowner. Here we go again.