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Albert Gonzalez faced the music in a U.S. District Court in Boston on Friday, pleading guilty to masterminding one of the biggest cases of identity theft in history. The deal he struck with prosecutors could have him turning big rocks into little ones for up to a quarter of a century.

The Miami resident compromised the computer systems of large, high-profile retailers, including TJX (NYSE: TJX), BJ's Wholesale Club (NYSE: BJ), OfficeMax (NYSE: OMX), Barnes & Noble (NYSE: BKS) and Sports Authority. Tens of millions of credit card numbers were swiped in this scheme, leading to 19 counts of conspiracy, computer fraud, wire fraud, access device fraud and aggravated identity theft -- if there are other charges ... well, you get the point.

Albert Gonzalez is calling it quits. Accused of masterminding the largest identity theft in the United States ever, he has agreed to plead guilty in U.S. District Court in Massachusetts. Separate charges filed in New Jersey, however, remain.

The 28 year-old faces 15 to 25 years in prison and will forfeit $1.65 million and a Miami condo (in addition to $1.1 million already seized). If the judge accepts the terms, this would be the longest sentence ever recorded for a hacking case.

Staples (NASDAQ: SPLS), a seller of office supplies and a competitor of chains such as Office Depot (NYSE: ODP), OfficeMax (NYSE: OMX), and Wal-Mart (NYSE: WMT), reported Q2 earnings on Tuesday. Although they weren't that great, I can't say I felt they were a total disaster, either. I think the quarter was lackluster and indicative of the immense work ahead for management in terms of getting people into their stores and increasing sales per transaction.

According to the press release, total sales increased 9% and adjusted earnings per share declined 24% to 16 cents. That's a steep drop, but they did match analyst expectations. Staples used the increase it saw in free cash flow in a smart way: debt reduction. I approve of that move, to be sure.

Staples (NASDAQ: SPLS) issued its Q1 report on Wednesday. Call me unimpressed. It beat earnings estimates by a penny, coming in at 22 cents on an adjusted basis. Sure, that's what investors want to see. They want the bottom line to go beyond expectations.

But there isn't a lot of excitement to be had with the Staples story. According to the press release, that 22-cent figure represented a decline of 27% in per-share profit. Furthermore, there's weakness in terms of same-store sales. In the North American market, comps dipped 8%. On the international front, comps went down by 14% in Europe.

With the recession still in full swing these days, retailers continue to try and entice consumers into stores with discounts, special programs and new and improved gimmicks to ensure sales don't decline to drastically. So, in that sense, does it sound logical that some retailers are actually opening new stores? In some ways this may actually make sense, as long as you still to small, efficient and highly profitable.

OfficeMax, Inc. (NYSE: OMX), Best Buy, Inc. (NYSE: BBY) and others are opening concept stores with a very limited selection of items in some markets and areas where full-size stores would be a huge risk. Best Buy has it Best Buy Mobile concept stores filled with high-margin wireless accessories and commissioned wireless handset and contract sales, and OfficeMax is launching stores with a selection of extremely popular items in stores as small as 2,000 square feet.

Staples (NASDAQ: SPLS), whose colleagues include Office Depot (NYSE: ODP) and OfficeMax (NYSE: OMX), is set to report earnings for the fourth quarter on Wednesday, March 11. The famous seller of office supplies has seen its stock go from a 52-week high of $26.57 all the way down to a 52-week low of $13.57.

Actually, that's one of the better ranges I've seen! Goes to show how bad things are out there. Staples saw its shares close at $14.63 on Monday, so a beat on the bottom line could really help things out.

Will management be able to beat? I don't have much confidence that it will, but that doesn't necessarily have to do with Staples per se, it's just that the economy's got me down on so many of these earnings prospects. Analysts are hoping for Staples to do about 42 cents per share in Q4, which would represent a 10% drop in the bottom line.

TheStreet.com's Jim Cramer says companies saddled with high debt loads can be found in every sector in every business.

Overleveraged. Too much debt. Need to pay down debt. How many times have you read that story?

You read it so much because it plays out every day and plays havoc with stock picking almost every time you see a savory stock down on its luck.

This weekend, as I went through the charts, I was amazed at how low some stocks have gone, stocks that I would normally say to just take a flyer on, but turn out to have so much debt, short- and long-term, that they are just too dangerous.

Consider these perhaps poisonous morsels:

Analyst upgrades:

• Philip Morris (NYSE: PM) was upgraded to Outperform from Neutral at Credit Suisse.
• Friedman Billings upgraded shares of Principal Financial (NYSE: PFG) to Market Perform from Underperform as they believe the company's capital buffer could keep outrunning credit losses.
  
• Friedman Billings also upgraded Office Max (NYSE: OMX) to Outperform from Market Perform. The firm believes the risk of recourse to Office Max from the Timber Notes formerly backed by Lehman is low and that any litigation by noteholders will have a low level of success.
  
• Citigroup upgraded CF Industries (NYSE: CF) to Buy from Hold on valuation following the recent weakness but lowered their target to $113 from $128.
• Analog Devices (NYSE: ADI) was upgraded to Buy from Neutral at Merrill Lynch.
  
• Granite Construction (NYSE: GVA) was upgraded to Neutral from Sell at Goldman.
  

Analyst downgrades:

Poor Office Depot (NYSE: ODP). Have you checked the price of the retailer's stock lately? It closed on Wednesday with a value of $2.10. It actually rose over 11% that day upon news of its third-quarter earnings. I can assure you that I wasn't buying the stock.

The numbers didn't tell the story of a company that would make a worthy addition to a stock portfolio hell bent on hanging tough during a market meltdown. Instead, the 7% revenue decrease and the loss per share, on an adjusted basis, of $0.01 relate a tale of a business that one should ignore. At least that's the way I see things. Comps in the North American retail division were horrible. The return on invested capital as calculated by management took a significant drop. Let's face it, Office Depot just isn't cutting it. Granted, the economy is wreaking havoc on the business, but come to think of it, I don't really have a good picture of what the brand is supposed to be about. Well, I know it's about office supplies, but why should I shop there as opposed to Staples (NASDAQ: SPLS) or OfficeMax (NYSE: OMX)? Good question, huh? Looks like the retailer needs to get the message out as to why the shopping experience at its locations is of a higher value compared to the office stores mentioned. For that matter, I'm sure a lot of people use Wal-Mart (NYSE: WMT) to pick up office supplies too. My point is that management needs to step up its game and create some better marketing programs for its stores. Be creative like Staples. That "easy button" device is turning into a cool cultural icon (well, I might be exaggerating, but I think it's creative, at any rate).

Earlier, I said "at least that's the way I see things" in terms of my opinion about the sad state of Office Depot, but I suppose I should point out that there are obviously a lot of investors out there who don't see a lot to love when it comes to this chain. The stock is down over 63% on the one-month period at the time of this writing. I see no reason to speculate on this business. The economy isn't getting better, and Office Depot just doesn't seem to be in a strong position. What will it take to turn things around? Like I say, in addition to hoping for an improved macro climate, come up with a better advertising campaign, build a more intense connection with the consumer. Office supplies are commodities, but shopping experience is not. That's the opportunity. Differentiating a brand from the competition based on things like customer service and an easy time of it at the checkout register is a traditional strategy in the retail industry. If Office Depot can offer something in that area, it should let me know about it. Since just about every retailer is struggling to keep the traffic coming into their chains, now is the time to exploit the other guy's weakened state and grab every customer possible.

Disclosure: I don't own any company mentioned; positions can change at any time.

Today and yesterday will go down in the history books as THE BAILOUT DAYS. The market was up sharply on record volume and short squeezes almost everywhere after the government bailout plans and the ban on short selling financial stocks. As the advance-decline line was massive with 85% NYSE stocks and 71% of NASDAQ stocks up on last look today, we wanted to mostly cover some of the ones which failed to chase the market. Here are today's unofficial closing bell averages:
DJIA 11,385.51 +365.82; +3.32%
NASDAQ 2,264.83 +65.73; +2.99%
S&P500 1,250.90 +44.39; +3.68%
10YR T-Bond 3.769% +0.332%
52-week lows
Top Analyst Upgrades
Top Analyst Downgrades

The biggest winner of the troubled financial stocks in today's final minutes was American International Group (NYSE: AIG). There was no news from the company, it was all the bailout and barring of short sales in the stock. Its shares were up more than 57% at $4.24 in today's final minutes before the close.

As we wanted to focus on the stocks that lagged today, here is that list of key stocks....

Yahoo! Inc. (NASDAQ: YHOO) was down 4% at $20.02 in the final minutes before the close but shares had been down as low as $19.27 today. Its loss of search market share again hurt the stock and day traders pounded it early on.

Russian business runs on different rules. News Corp.'s (NYSE: NWS) Rupert Murdoch, who has been doing business in China for years, is nervous about his Russian enterprises. This morning, the FBI announced it had rounded up a ring of data thieves, many from former Soviet Union countries. And then there's the little matter of BP-TNK, a joint venture between BP (NYSE: BP) and a Russian company, whose Russian shareholders are booting out its Western executives so they can take over the operation.

Here's what Silicon Alley insider reports Murdoch had to say about doing business in Russia: "We have great growing business there but just -- this is purely me, I'm sorry, I'm -- the more I read about investments in Russia, the less I like the feel of it. The more successful we'd be, the more vulnerable we'd be to have it stolen from us, so there we sell now."

In case you missed it, The Detroit Free Press reports that an international ring of data thieves used wardriving -- the practice of stealing data from unprotected Wi-Fi networks -- to take 40 million identities, use the information to print fake ATM cards, and steal millions of dollars. The corporate victims include customers of TJX (NYSE: TJX), Barnes & Noble (NYSE: BKS), and OfficeMax (NYSE: OMX). Five of the 11 defendants are from former Soviet Union countries -- "one is from Estonia, three are from Ukraine, and one is from Belarus."

MOST NOTEWORTHY: Norfolk Southern, OfficeMax and PetroQuest Energy were today's noteworthy upgrades:

• JP Morgan upgraded Norfolk Southern (NYSE:NSC) to Overweight from Neutral based on leverage to export coal and the tighter truckload market.
  
• Credit Suisse upgraded OfficeMax (NYSE:OMX) to Outperform from Neutral citing the company's clean balance sheet, positive cash flow, and limited downside.
  
• UBS upgraded PetroQuest Energy (NYSE:PQ) to Buy from Neutral citing valuation and production catalysts. The company's target was raised to $30 from $25.

OTHER UPGRADES:

• Piper Jaffray (NYSE:PJC) was upgraded to Market Weight from Underweight at Thomas Weisel.
  
• Corning(NYSE:GLW) was upgraded at Merrill to Buy from Neutral.
  
• HSBC lifted BP Plc (NYSE:BP) to Overweight from Neutral.
  
• Calgon Carbon (NYSE:CCC) was raised to Hold from Sell at Morgan Joseph.

MOST NOTEWORTHY: iRobot, Felcor Lodging and Office Max were today's noteworthy initiations:

• Stanford initiated iRobot (NASDAQ: IRBT) with a Buy rating and $18 target and believes better-than-expected military robot sales will allow the company to beat 2008 consensus estimates.
  
• Felcor Lodging (NYSE: FCH) was initiated at Keefe Bruyette with a Market Perform rating and $12.50 target. The firm believes material upside is unlikely given the company's above average suburban and airport exposure.
  
• Soleil assumed Office Max (NYSE: OMX) with a Hold rating and $17 target, as they believe macroeconomic challenges and heightened competition will limit near-term upside in the stock.

OTHER INITIATIONS:

• Broadcom (NASDAQ: BRCM), Marvell Tech (NASDAQ: MRVL) and Nvidia (NASDAQ: NVDA) were initiated with Outperform ratings at Cowen.
  
• Knot Inc. (NASDAQ: KNOT) was started with an Outperform rating at William Blair.
  
• Deutsche Bank initiated Cardtronics (NASDAQ: CATM) with a Buy rating and $13 target.

MOST NOTEWORTHY: Verizon, AT&T, Invitrogen and General Electric were today's noteworthy downgrades:

• UBS downgraded Verizon (NYSE: VZ) and AT&T (NYSE: T) to Neutral from Buy citing the weak economy and increased wireless competition.
  
• Banc of America downgraded shares of Invitrogen (NASDAQ: IVGN) to Neutral from Buy as the company's acquisition of Applied Biosystems (NYSE: ABI) alters their investment thesis. The company's target was cut to $38 from $50.
  
• JP Morgan downgraded General Electric (NYSE: GE) to Neutral from Overweight citing further risk to earnings and dislocation from necessary portfolio management in 2009.

OTHER DOWNGRADES:

• Office Max (NYSE: OMX) was cut to Neutral from Outperform at Credit Suisse.
  
• Goldman lowered Ryanair (NASDAQ: RYAAY) to Sell from Buy.
  
• WebMD Health (NASDAQ: WBMD) was downgraded to Sell from Source of Funds at ThinkPanmure.

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

• CEC Entertainment Inc. (NYSE: CEC) reported a profit loss and flat revenue for the fourth quarter.
• Darden Restaurants Inc. (NYSE: DRI) raised its third-quarter and full-year earnings forecasts.
• Forward Air Corp. (NASDAQ: FWRD) beat earnings estimates and offered guidance.
• General Mills Inc. (NYSE: GIS) raised its 2008 and 2010 earnings forecasts on strong sales.
• Hewlett-Packard Co. (NASDAQ: HPQ) reported better-than-expected earnings and offered bullish guidance.
• Intuit Inc. (NASDAQ: INTU) second-quarter profits fell and it offered meager guidance.
• JC Penney Inc. (NYSE: JCP) reported a smaller-than-expected profit decline for the fourth quarter.
• Medtronic Inc. (NYSE: MDT) third-quarter profit and revenue beat analysts' expectations.
• OfficeMax Inc. (NYSE: OMX) easily beat fourth-quarter earnings expectations on lower costs.
• TJX Companies Inc. (NYSE: TJX) fourth-quarter profit beat estimates and helped raise the retail outlook.
• Whole Foods Market Inc. (NASDAQ: WFMI) earnings were dragged down by the Wild Oats acquistion.

Also, Douglas McIntyre examines how a slowdown in orders is likely to affect the earnings of Airbus and Boeing Co. (NYSE: BA), and Brian White looks at how HP might "do better" for the rest of this year.

Upcoming results to watch for include Lowes Companies Inc. (NYSE: LOW), Office Depot Inc. (NYSE: ODP), Home Depot Inc. (NYSE: HD), AutoZone Inc. (NYSE: AZO), Viacom Inc. (NYSE: VIA), and Freddie Mac (NYSE: FRE).

Visit AOL Money & Finance for more earnings coverage.