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Office Depot, the retailer that professes to help companies in “taking care of business,” could use a little assistance of its own. The stock is set finish 2007 down more than 60%, wrapping up a volatile year, and senior management could come under scrutiny if things don’t pick up. That was message, at least, from J.P. Morgan on Monday.

The firm reiterated an overweight rating on the Delray Beach, Fla.-based office products retailer but took its executive team to task somewhat, saying the company’s execution issues during a period of deteriorating business trends have put it at the crossroads.

“Senior management has a lot to prove from here,” he said.

J.P. Morgan did a sort of psychoanalysis on the company in its note, saying that Office Depot’s senior management is too entrenched in its victim role, still bemoaning its blocked merger with Staples by the Federal Trade Commission in 1997 and an unfavorable macroeconomic environment, to see opportunities for change.

Among the self-inflicted issues impacting the company, according to J.P. Morgan, are a rough integration of its Allied acquisition, a regulatory review of its accounting practices and the $370 million in one-time charges it’s incurred since the second-half of 2005. The firm sees Office Depot’s turnaround playing out in one of two ways: either management gets it together or gets out. Chief Executive Steve Odland, in particular, may find himself in the hot seat. The firm noted that as of Friday’s close, the stock is off roughly 29% since he became CEO in March of 2006, when shares stood at $19.19.

“The new CEO,” J.P. Morgan said, “isn’t so new anymore.”

Click-happy online shoppers have been busy this holiday season, according to the latest figures from Internet tracking company comScore Inc.

Between Nov. 1 and Dec. 27, non-travel-related Internet retail spending rose 19% to some $28 billion, compared with the $23.6 billion spent online during the same period a year ago, the Reston, Va.-based company said Sunday.

That figure might have been higher if it wasn’t for warmer weather during early November, comScore said -– during the 2006 holiday season online retail sales grew 26% over the previous year.

Not that online retailers have too much to be disappointed with. This year’s core holiday shopping season (the period between the day after Thanksgiving and December 24) was far from a bust, with sales increasing 21% to $17.98 billion.

Plenty of shoppers hopped online after Christmas, too, according to comScore: Internet sales of some $545 million on Dec. 26 alone more than doubled the amount spent on Dec. 26 a year ago.

Ah, the final day of the year, when champagne bottles pop, a ball drops in Times Square, and people across the globe ring in the new year with a rousing verse of Auld Lang Syne, which asks, “Should old acquaintance be forgot, and never brought to mind?” In a weekend where the same three films made up the same trio last weekend, old acquaintances were indeed not forgot.

Disney Inc.’s “National Treasure: Book of Secrets” remained the number one film of the week, pulling in $35.6 million. In just two weeks of release, the action sequel has banked $124 million, benefiting from a family-friendly rating and a school holiday. The film looks set to surpass the $173 million domestic take of the first “National Treasure” film, meaning we could see “National Treasure 3: Dayplanner of Doom” before too long.

Kicking it up a notch was Fox’s “Alvin and Chipmunks,” which not only moved from third to second place in a week, but actually saw its grosses increase 6.5% from last week. The film made $30 million over the week, for a $142.4 million total.

Changing places with “Alvin” was the Warner Bros. zombie-vampire flick “I Am Legend” which earned $27.5 million, for a cumulative total of $194.6 million. The film lost a meager 17.9% of its audience form last week, thanks partly to a lack of new competition.

Two films that opened Christmas Day took sixth and seventh place: Fox’s “Alien vs. Predator-Requiem” earned $10.1 million while Sony’s “The Water Horse” galloped away with $9.2 million.

By one measure, the best-performing film of the weekend was the teen pregnancy comedy “Juno”, which, thanks to an expanded theater count, landed in fifth place. Fox Searchlight’s acclaimed film knocked up $10.3 million, with its $10,321 per-theater average, the best in the Top 10. The film, with little star power and not much of an ad campaign behind it, will have to rely on word of mouth and positive reviews.

The total gross of the Top 10 films was $158.1 million, up 18% from the year-ago period. It’s not a bad way to end the year. Let the champagne flow.

Stocks finished an erratic week narrowly mixed Friday after a government report of a steep decline in new home sales stirred concerns that weakness in housing will continue to dog the economy. The Dow Jones industrial average rose 6.26 points, or 0.05%, to 13,365.87, while the Nasdaq composite index fell 2.33, or 0.09%, to 2,674.46, and the S&P 500 rose 2.12, or 0.14%, to 1,478.49. Elsewhere, the yield on the 10-year Treasury note fell to 4.08% from 4.19% late Thursday, and light, sweet crude fell 62 cents to settle at $96 per barrel on the New York Mercantile Exchange.

ECONOMIC DATA:

- Existing home sales for November, 10 a.m. ET

AFTER-HOURS ACTION:

After Friday’s closing bell, Legg Mason said it lowered its exposure to structured investment vehicles to 3.2% of its total liquidity assets by cutting securities held by two of its non-U.S. liquidity funds.

Over the last month, a lot of news has swirled around Citigroup, and as far as Wall Street is concerned, it’s been all bad.

There was a $7.5 billion capital infusion out of Abu Dhabi, and Citi recently put $49 billion worth of troubled structured investment vehicles onto their books after saying they wouldn’t do that, prompting credit rating downgrades.  More recently, Goldman Sachs suggested on Thursday a house cleaning through further writedowns of collateralized debt obligations and a 40% dividend cut; and on Friday, the Wall Street Journal reported that Citi may dispose of $12 billion in noncritical assets.

And certainly not least, Citi named intraday on Dec. 11 Vikram Pandit as its CEO and Sir Win Bischoff as its chairman, moving Robert Rubin back to his previous post of chairman of the executive committee, in hopes that they could fix the problem.

All that and the stock keeps getting hit.

And since Wall Street doesn’t mince words, it’s pretty clear that investors don’t believe the new leaders can make things any better, at least not through the already anticipated ways of tabula rasa writedowns, capital infusions (at a high cost, by the way), asset sales and/or a dividend cut.

The stock, a component of the Dow industrials, ended Friday’s regular session down 0.9% at $29.29, the lowest closing price seen since Oct. 10, 2002. It has lost 37% since the end of the third-quarter and 47% so far this year.

Since the Dec. 10 close, the day before the new management team was announced, the stock has lost 16%, including 10 losing sessions out of 13.

Pandit and Bischoff have to be a lot more creative and bold if they don’t want investors to keep spanking the stock, and they better do it soon. Patience is not always a jewel on Wall Street.

Wall Street continued to cut earnings expectations last week, according to a Thomson Proprietary Research report that tallies analyst estimate revisions each week.

The latest data, covering the week ending Friday, puts total revisions at 1,078. Only 35% of those changes, 378, were upward revisions. The remaining 700 adjustments, or 65%, moved expectations to the downside. Ouch.

It’s a trend that’s now held for the whole of December. In fact, it’s gradually gotten worse as the weeks went by. The percentage of total revisions that were lower went from 55% for the week ended Dec. 7 to 58% for the week ended Dec. 14 to 60% for the week ended Dec. 21.

The most active revision period over the month-long timeframe was the week ended Dec. 14, when revisions totaled 2,659.

Dow component Citigroup was subjected to a huge downward swipe by Goldman Sachs on Thursday when the firm more than doubled its loss estimate for Citigroup’s fourth-quarter report to $1.33 a share from 52 cents, citing expectations for CDO-related writedown of $18.7 billion. That sentiment is reflected the performance of Citigroup’s stock in 2007. It’s by far the biggest loser in the Dow Jones Industrial Average, off nearly 48% year-to-date in midday trades. The next closest decliner is Home Depot, down about 34% for the year.

The race for top performer among the blue chips is a bit more interesting. There are four serious contenders - Honeywell, Intel, McDonald’s and Merck. At the moment, Honeywell has pole position, up 35.1%. The top four is rounded out by McDonald’s, Merck and then Intel, with gains of 34.33%, 34.27% and 33.2%, respectively. Overall, the DJIA’s breadth for 2007 in pretty positive with two-thirds, or 20 of the 30 components, posting gains.

It’s no surprise that the financial sector was a big drag, with AIG off almost 20%, AmEx, down 16% and JPMorgan, sliding 11%. Other double-digit decliners include GM, falling 19%, and Pfizer, down 11.7%. The heavy industrials did well, as evidenced by Honeywell’s success, as well as gains of 22.6% from Alcoa, 9% from 3M, and 23% from United Technologies. Other notables to the plus side are Microsoft, up nearly 20%, Verizon, rising 19.4%, Exxon Mobil, gaining 22.3%, Philip Morris, adding 18%, IBM, up 12%, and H-P, tacking on 24.8%. Should be interesting to see if anyone from that diversified group - a drug co. (Merck), tech co. (Intel) and McDonald’s (consumer goods) can reel in Honeywell in the year’s final trading session on Monday.

Call it a shotgun merger.

Genesco shares surged Friday after a Tennessee court ruled Finish Line must got through with its planned $1.5 billion acquisition of the company. Finish Line issued the usual statement of consternation at the legal setback and said it’s mulling an appeal. And just looking at the numbers, it’s easy to see why. Finish Line shares, which tumbled more than 22% in early trades, are now down about 83% year-to-date. As of Thursday’s close, the stock was off 42% since Genesco filed the lawsuit on Sept. 21. That doesn’t exactly bode well for a happy combination.

Trouble with the proposed deal began in late August, when Genesco reported a second-quarter loss before discontinued operations of $2.9 million, or 13 cents a share, including $5.5 million, or 13 cents a share, in pretax expenses related to the merger. Analysts polled by Thomson Financial, on average, were estimating earnings of 31 cents a share at that time. Shortly thereafter, Finish Line issued a statement that it was disappointed in Genesco’s results and would evaluate all options in accordance with the merger.

In September, the two companies traded lawsuits as Finish Line filed a claim alleging a “material adverse effect” had occurred that should absolve its commitment to the merger. Genesco, in turn, filed a claim that Finish Line was in breach of the agreement and asked the court push the transaction through. And that’s exactly what this court ruling has done, ordering Finish Line to proceed with its $54.50 per-share cash acquisition offer.

Beyond the obvious concerns about how well the companies will be able to integrate in the wake of so much posturing and ill will, one legal obstacle remains. UBS, the bank lined up to finance the deal, has a counterclaim pending in a New York court in which it claims the transaction should be terminated. This claim is based on a claim that the combined entity would be insolvent. The Tennessee court left the solvency issue to the New York court. Goldman Sachs views the ruling as one step toward completing the transaction but cautions that this is nowhere near a done deal. “However, the ruling also makes clear that litigation surrounding the transaction is far from over and completion of the transaction remains uncertain.” That sentiment is reflected in Genesco’s stock price, which may be up 15% in Friday’s session to $37.91 but that’s still 30% below the Finish Line buyout price of $54.50.

It’s the second-to-last trading session of 2007 and despite the turmoil of the past six months, the major U.S. equity indices are all in positive territory. As of Thursday’s close, the Dow Jones Industrial Average was up 7.2%, the Nasdaq Composite 10.8% and the S&P 500 4.1% year-to-date. No great shakes, especially the S&P 500, but respectable in light of the mortgage mess and resulting credit crunch.

Traders on Friday will have more economic data to consider against the backdrop of the political turmoil in Pakistan following the assassination of opposition party leader Benazir Bhutto. New home sales for November and the Chicago Purchasing Managers index are on tap just after the opening bell.

Thursday’s session saw the DJIA tumble nearly 200 points to 13.359.61. The S&P 500 was off more than 20 points to 1,476.27 while the Nasdaq Composite slid almost 2% to 2,676.79.

ECONOMIC DATA:

- Chicago Purchasing Manager’s index for December, 9:45 a.m. ET, 53.5 estimate
- New home sales for November, 10 a.m. ET, 730,000 estimate