Barnes & Noble (BKS), the bookstore and online retailer, reported losses for its second quarter. The company reported lower sales in the quarter despite the fact that former rival, Borders Books, had liquidated in bankruptcy in September.

Despite the fact that B&N increased its online sales, the company experienced a decline in sales for both its retail and college operations, which overshadowed the growth in online sales. While online sales grew by 17% in the quarter, the company's losses for its online business grew by 17.3%

For the quarter, the company lost $6.6 million, or $0.17 per share. This actually represents an improvement from the same quarter last year in which the company lost $12.6 million, or $0.22 per share.

Late in the quarter, B&N launched its NOOK Tablet – a digital reading tablet. B&N's NOOK business increased by 85% in the second quarter. Barnes & Noble's CEO, William Lynch, stated the launch of the NOOK "represents the highest-quality portfolio of digital reading products on the market at incredible values." Lynch stated that Barnes & Noble expects "to sell millions of devices during our third quarter" which he said will position Barnes & Noble "as one of the fastest growing companies in this exploding digital content market, and we project this will generate significant returns on our investments for years to come."

Barnes & Noble (BKS) stock finished the week trading at $16.04 per share.

American Airlines Seeks to Unload Labor Costs in Bankruptcy

Last week, American Airlines' parent company, AMR Corporation (AMR) filed for federal bankruptcy protection. The move has been largely seen as a way for American to reduce certain labor costs which, according to analysts, would bring the airline's labor costs in line with its competitors. Estimates suggest the airline is paying approximately $800 million more in annual labor costs than if it had contracts comparable to its competitors.

AMR will be restructuring its $30 billion in debt during the bankruptcy process. According to media reports, one bankruptcy expert, noting that the airline had more than $10 billion in secured debt, has stated the airline's unsecured creditors would be hit the hardest. They can expect to receive less than ten cents on the dollar for any debts owed by the airlines. The airline's bondholders are owed $847 million.

Boeing Co. (BA), Citgo Petroleum Corporation, and LSG Sky Chefs are among the company's primary trade creditors. These creditors will likely be largely unaffected by the bankruptcy. Representatives from Boeing and LSG Skey Chefs have stated their companies would work with American during the bankruptcy process.

Several local governments and agencies, such as the cities of Chicago and Los Angeles, Miami-Dade County and the Port Authority of New York and New Jersey, are unsecured creditors – all in relation to American's operations at local airports. The airlines may leave the municipalities and their agencies without recoupment for past costs.

The bankruptcy may also leave federal taxpayers on the hook for some of the airline's pension liabilities if the company offloads those to the Pension Benefit Guarantee Corporation, the federal backstop to prevent pension losses.

Since 2007, American Airlines has lost $4.8 billion, turning a profit in only one quarter. American continues to operate 247 gas-guzzling MD-80 airplanes but has plans to modernize its fleet by ordering 460 jets from Boeing. American does not need a bridge loan, known as debtor-in-possession financing, to continue operations during bankruptcy as the company will rely on cash reserves instead. Following news of the bankruptcy filing, American's stock tumbled more than 80% in a single day.

AMR Corporation's (AMR) stock ended the week at $0.39 and Boeing Co. (BA) ended at $71.27 per share.

Market Views Krispy Kreme's Earning's Report as Hot, Fresh

Krispy Kreme Doughnuts (KKD), the North Carolina-based doughnut franchise company, reported its third-quarter earnings this week. The company also raised its outlook for the remainder of the current fiscal year and provided guidance for fiscal year 2013.

For the quarter, the company's revenues rose 9.4% and operating income rose 36.2%. For the twelfth quarter in a row, the company's same store sales increased. The company posted quarterly net income of $4.7 million (or $0.07 per share), nearly doubling its net income of $2.4 million from a year ago.

Krispy Kreme's Chief Executive Officer, James H. Morgan, commented on the earnings report, stating: "Our third quarter performance reflects continued progress in strengthening our financial condition and realizing our vision for the Krispy Kreme brand. We generated a healthy increase in revenues, recorded our twelfth consecutive quarter of positive same store sales at Company stores, and delivered substantial improvements in both profitability and operating cash flow."

During the quarter, the company opened nine stores, bringing the total number of stores for the doughnut-maker to 678. Of those stores, 89 are company-owned and 589 are franchise outlets. In the next fiscal year, the company expects to open up to 10 company stores, 15 new franchise stores and 60 international ones. The company released its preliminary guidance for fiscal 2013 projecting operation income from $29 to $33 million and diluted earnings per share in a range of $0.35 to $0.41.

Shares of Krispy Kreme Doughnuts (KKD) closed the week at $7.15.

The Dow started the week at 11,232 and closed at 12,019. The S&P 500 started the week at 1,159 and ended at 1,244. The NASDAQ started the week at 2,442 and finished at 2,627.

Treasuries fell for the steepest weekly loss since October in advance of a government report that showed the U.S. unemployment rate had fallen by 0.4 percentage points. According to the Bureau of Labor Statistics, the U.S. added 120,000 jobs in November compared to the 80,000 reported in October.

Hiroki Shimazu, a Tokyo-based economist with SMBC Securities Inc. stating, "The current yield level is too low given the growth outlook." He continued stated that "yields are likely to rise gradually as we continue to see good numbers in the U.S. economy."

While the decline in the unemployment rate and the new jobs number is welcome news, BLS's job report was not entirely positive. The labor participation rate fell 0.2 of a percentage point as 315,000 American dropped out of the workforce altogether. In other words, the drop in unemployment is driven in part by the fact that hundreds of thousands of people have stopped looking for work. Additionally, hiring has historically picked up in November as retailers prepare for the upcoming holiday season. It remains to be seen whether the jobs reported for November are purely seasonal. The January jobs report will be telling as to whether the world's largest economy is on its way to full recovery.

Despite the decline, Treasuries remain one of the best-performing bonds this year as investors are seeking the relative safety of American securities while Europe deals with its debt crisis. Treasuries remain highest in returns over the past six months out of 144 bond index compilations.

The 10-year Treasury note yield finished at 2.04% and the 30-year Treasury note yield finished at 3.02%.

Freddie Mac released its Primary Mortgage Market Survey detailing that mortgage rates remain near historic lows. The 30-year fixed-rate mortgage (FRM) averaged 4.00%, up from last week when it averaged 3.98%. This marked the fifth consecutive week that the 30-year rate has averaged at or below 4.0%. Last year at this time, the 30-year FRM averaged 4.46%.

The 15-year FRM remained unchanged this week averaging 3.30%. One year ago at this time, the 15-year FRM averaged 3.81%.

"Mortgage rates were little changed this past week," said Frank Nothaft, Freddie Mac Vice President and Chief Economist. "The extraordinarily low mortgage rates of the past month may provide a needed spur to housing activity."

Nothaft noted that economic data released this week hinted at positive economic movement. The consumer confidence index saw its largest jump in November since April 2003. Pending home sales increased by 10.4% in October, registering the strongest pace since November 2010.

The money market fund finished this week at 0.50%. The 1-year CD finished at 0.70%.