On Tuesday, July 27, E.I. du Pont de Nemours & Company (DD) reported a blowout quarterly earnings report. The company earned $1.159 billion, or $1.26 per share, compared to $417 million, or $0.46 per share, in the year ago period. On an adjusted basis, net income attributable to the company was $1.1 billion or $1.17 per share, versus $558 million or $0.61 per share, in last year's corresponding quarter. This compared to Wall Street estimates of $0.93 per share. It was a tremendous beat and highlighted the company's earnings momentum.

Quarterly net sales surged 26% to $8.62 billion compared to $6.86 billion in the second quarter of 2009. This came in well ahead of analysts' expectations of $8.23 billion. Furthermore, emerging market sales increased 32% in the quarter and the company said that all segments had double-digit sales increases.

DuPont also raised its forward-looking guidance. The company now expects fiscal 2010 adjusted earnings per share in a range between $2.90 and $3.05. This is well ahead of current Wall Street earnings estimates which are pegged at $2.64.

E.I. du Pont de Nemours & Company (DD) turned out to be a disappointment. At least in the short term. I say this because I was positive on the stock as a trade back in April when the chemical company reported Q1 numbers.

Since that time, the equity has done nothing, as this chart clearly shows. And yet there are signs the stock wants to climb back. Guess it's all the volatility we've been experiencing.

Is it time to dump dividend stocks before the Bush tax cuts expire? In 2001 and 2003 Bush, passed several tax relief bills that will automatically expire at the end of 2010. Obama campaigned against the tax relief packages and many Americans may be facing a huge tax increase as the package expires.

Dividend taxation is of particular concern to investors. Under the relief packages, dividends taxes were cut to 15%, but if the package expires, dividends may be taxed as ordinary income at levels up to 39.6%.

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

• Aflac Inc. (AFL) higher Q1 earnings were better than analysts expected, due in part to a stronger yen.
• Automatic Data Processing Inc. (ADP) Q3 EPS were the same as a year ago and revenue inched higher.
• BlackRock Inc. (BLK) higher Q1 earnings fell short of analysts' expectations due to acquisition-related charges.
• Broadcom Corp. (BRCM) posted record revenue in Q1 and swung to a profit from a year-ago loss.
• Burger King Holdings Inc. (BKC) topped Wall Street's Q3 earnings estimate, but same-store sales fell.

Let's have a quick look at two Dow components. One is famous for its chemical products, while the other is known for its iconic sticky stationery.

Chemical manufacturer E.I. du Pont de Nemours & Company (DD) was, at the time of this writing, down $1.16, or 2.8%, to $39.79. A disappointment, to be sure, since the stock has been doing so well over the last twelve months. The following chart shows the upward bias, and one might have expected a decent trading day after the first-quarter earnings were released.

U.S. stock futures declined Tuesday morning, following world markets as concerns over Greece debt problems heightened again. On Wall Street, investors prepared for the Federal Reserve two-day policy meeting that's beginning today and a Goldman Sachs hearing in front of a U.S. Senate committee. And as more earnings were digested, investors awaited some economic data due out this morning.

Overseas, world markets mostly fell amid mounting concerns about the Greece's ability to tap a bailout facility as Germany demanded new austerity measures first. There were also fears that Chinese authorities were preparing measures to cool down the economy and stocks in Shanghai dropped sharply.

To those taking time off for Good Friday: "May the Force Be with You!" To those working half days, enjoy your time with your families. The U.S. stock markets are closed today and that might be best so that we all can take a breather.

Given that stock markets all around the world were up yesterday, including ours -- again ... April Fool's Day! -- even day traders expressed confidence because they obviously were willing to hold stocks knowing the long weekend left plenty of time for unforeseen bad news to to slam their positions.

While most investors are fretting the markets recent contraction, you can be quite confident that "my pal Warren" has a smile on his face, as does Peter Lynch, Ken Heebner, Bill Miller, Bruce Berkowitz, and any number of fellow value investors that know now may be a time of opportunity. That is because they have the experience and understanding to pounce when they have a chance to buy things cheap.

This is the fourth installment of my series to discover just that: cheap stocks. If you would like to get on board from the beginning then review the initial post which screened for stocks with lower than market average P/E ratios, see Serious Money: Market Looks Cheap to Me -- 35 Stocks. In the second installment, I looked at yield and PEG ratios: Serious Money: Still Cheap Market -- 35 Stocks + Yields & Growth. Then I moved on to the the P/S and P/CF metrics in Serious Money: Cheapest Stocks Yet -- From 35 to 26, cutting nine stocks.

Is the market overpriced? Maybe it is cheap, or perhaps it is fairly valued. This is the third in a series examining the issue. Still, it has been my contention that it does not make any difference because no matter how the market is valued as a whole, there are plenty of cheap stocks out there to accommodate a large amount of capital allocation even this deep into a bull run.

If you would like to follow along from the beginning, the initial post screened stocks for lower than market average P/E ratios: Serious Money: Market Looks Cheap to Me -- 35 Stocks. In the second installment, I looked at yield and PEG ratios: Serious Money: Still Cheap Market -- 35 Stocks + Yields & Growth.

Let's try and reduce the gambling by examining the facts and ignoring what the bulls and bears are chatting up at the moment. We started the process by screening for lower than market average P/E ratios, see: Serious Money: Market Looks Cheap to Me -- 35 Stocks.

Two more important criteria influence today's review: the yield, a favorite of "my pal Warren"; and the price-to-earnings-to-growth (PEG) a focus of Peter Lynch, the retired fund manager extraordinaire of Fidelity's Magellan Fund.

We frequently receive comments that the market is overpriced. Recently one of our active readers commented that the market P/E was 30, which it's not. The actual rate (S&P forecast) has been even higher at times due to the volatile market.

The average should trend closer to the long term P/E of 15.7 in the next few years. However, I have reviewed companies often covered on our site and come up with a list of 35 stocks that have price-to-earning ratios below the long-term average already. I think there are dozens of bargains regardless of the status of the overall market.

Investors should take their profits with E.I. du Pont De Nemours and Co (DD), first recommended on April 22, 2009 at a price of $27.48. A Hold was also placed on DD's shares on November 6, 2009.

Given pharmaceutical and industrial/auto sector headwinds, Du Pont's shares look a bit rich at $32.50.

U.S. stock futures declined Tuesday morning as global growth concerns hit markets following S&P downgrade of Japan's outlook and reports of further tightening in China that could hamper growth. Meanwhile, in the U.S., the Federal Reserve begins its two-day policy meeting on Tuesday, amid several economic indicators due out.

U.S. stocks rose Monday as bargain hunters jumped in. But trading was light as Wall Street awaited news from later in the week regarding the confirmation of Federal Reserve Chairman Ben Bernanke, the State of the Union address and bank regulatory developments. Meanwhile, the earnings season continues to give mixed results, not fully convincing investors a recovery is underway.

Analyst Upgrades

• FBR Capital upgraded New York Community Bancorp (NYB) to outperform from market perform following the FDIC-assisted acquisition of AmTrust. The firm raised its target price on shares to $16 from $11.
• Oppenheimer upgraded Brocade (BRCD) to outperform from perform to reflect valuation, low investor expectations, and the company's potential to gain market share in IP/Ethernet switching. The firm set a target price of $8.50 on shares.
• Stifel Nicolaus upgraded National Health Investors (NHI) to buy from hold following the announcement that the litigation vs. Care Foundation has been dismissed. The firm has a $37 target on the stock.
• American Express (AXP) was upgraded to neutral from underperform at BofA/Merrill.
• ACE Ltd. (ACE) was upgraded to buy from neutral at Goldman.
• Kohl's (KSS) was raised to outperform from neutral at Baird.

Today's big shock came in the figures on unemployment as the rate posted a surprising drop to 10.0% from 10.2%. The second was in non-farm payrolls, which posted a decline of only 11,000 jobs rather than the 100,000 expected. Factory orders posted yet another gain as well. Yet the dollar strength caused a reversal of the immediate gains and the markets backed off of the early gap-up levels earlier in the day. Shares were mostly higher at the end of the day but the feeling was one of disappointment that more buying was not out there after the great jobs news.

Here were the unofficial closing bell levels:

Top 10 Analyst Calls
Top Day Trader Stocks