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The massive earthquake in China, which has killed almost 12,000 people so far, is unlikely to have any major impact on U.S. businesses. But for solar investors, perhaps a word of caution is necessary.

The epicenter of the 7.9 magnitude earthquake is near one of the main polysilicon production areas in the country, particularly Emei and Sichuan Xinguang, and Yongxiang, according to George Kotzias, an analyst at Calyon Securities. Emei and Xinguang are two major producers of the solar raw material, while Yongxiang is a major supplier of trichlorosilane (TCS) gas to both of these companies.

Kotzias said solar cell makers that may be impacted by a slowdown of polysilicon from these suppliers include Yingli Green Energy Holding (YGE), Solarfun Power Holdings (SOLF) and to a much lesser extent Suntech Power Holdings (STP).

While no reports of serious structural damage have been reported by Chinese poly producers to date, power disruption has been a major problem, as damage to the power grid as well as government imposed shut-downs of generating plants is choking off power to poly producers.

“Poly plants need steady and reliable power to operate. 1,000 tons of polysilicon capacity requires about 50MW of installed coal capacity and back-up power is not an acceptable alternative. If poly plants experience power outages … production will shutter,” he said.

Kotzias recommended that solar investors seek safety in U.S. names until the picture in China becomes clearer. U.S. silicon based cell makers like Evergreen Solar (ESLR) and SunPower Corp. (SPWR) have 100% of their poly contracted with non-Chinese companies and therefore are immune from the impact of the earthquake. Thin-film players First Solar (FSLR) and Energy Conversion (ENER-BUY-$63), have no exposure to poly prices. In addition, Kotzias said as power disruption would reduce the already tight poly supply and push up spot prices, U.S. suppliers like MEMC Electronic Materials (WFR) could benefit in the short-term given their exposure to the spot market.

As gas prices head above $4 a gallon another round of belt tightening appears to be imminent, and talk of economic stimulus package payments stimulating the economy may turn out to be somewhat overblown.

The federal government is distributing about $105.7 billion as part of the February law that ushered in the payout plan. About 40% of consumers surveyed by the National Retail Federation between late April and early May said they planned to purchase something with their rebate checks. If that pattern were to hold true for everyone receiving a rebate payment, some $42 billion would find its way back into the economy, the consumer research and industry advocacy organization said.

Consumers’ spending plans have also shifted since an NRF survey in February, the organization found. Now, people are more likely to spend a larger chunk of their checks on essentials like food and gasoline.

By contrast, fewer people plan to spend the money on furniture, and fewer will put the cash toward vehicle purchases and salon or spa treatments.

Rebate payments range from $600 to $1,200, plus $300 per child for those with children.

There doesn’t appear to be clear consensus among retailers and analysts about the potential benefits of the stimulus package. Recent spending trends would appear to be positive: While April retail sales dropped 0.2% from March, they rose 2% over year-ago figures, the Department of Commerce said Tuesday. Total sales for February through April 2008 rose 2.2% on a year-over-year basis.

Similarly, Wal-Mart Stores Inc. on Tuesday said its first-quarter sales rose, but sounded a note of caution. Though the Bentonville, Ark.-based retailer, the world’s largest, posted earnings and revenue that topped analysts’ targets, the stock fell as investors took in a cautious second-quarter forecast. “As we have discussed, it is currently difficult to quantify the impact on U.S. sales from the stimulus payments,” Chief Financial Officer Tom Schoewe said in a prepared statement.

Goldman Sachs sees potential stimulus package gains for Wal-Mart in the second quarter and said Tuesday that the company’s initial second-quarter guidance for a profit of 78 cents to 81 cents a share – at the low end of the 81-cent consensus view – could prove conservative, because it doesn’t account for rebate spending.

But Credit Suisse said Tuesday further price appreciation could prove difficult for the stock because expense headwinds are hurting the company’s operating margins. The broker said Monday it found investors aren’t all that upbeat on the stimulus payments generally.

“Oil prices continue to spike higher, and investors are beginning to appreciate that the stimulus money may not save consumer spending. In fact, at our meeting at Sears, management commented that they are not holding out great hopes for the stimulus to pick up sales partly because a high percentage are direct deposit and hence less visible to the consumer,” analyst Gary Balter wrote in a note to clients.

For Jamie Dimon of JPMorgan Chase, being chief executive of the only Wall Street financial institution to post positive returns on its stock year-to-date can not only be a blessing, but also a curse.

As with any great accomplishment, success is often accompanied by a certain level of credibility and respect.Which is why, when Dimon spoke at a presentation in New York on Monday, the investment world was listening intently. Unfortunately, it didn’t like the message it heard.

“Mr. Dimon may have the most negative outlook of anyone in the industry,” Ladenburg Thalmann analyst Richard Bove said, maintaining a neutral rating. “He made two positive comments; the financial crisis is 75% over and will be gone by year-end; and JPMorgan has a very strong balance sheet. But that was it.” Bove, who admits to viewing Dimon as “completely candid” and “much smarter than the average financial company executive,” said it was depressing listening to the savior of Bear Stearns speak. “Mr. Dimon is convinced that the recession is just beginning. Moreover, he feels that this recession will be more severe than any seen in this country for 25 years,” Bove said.

The recession will be driven by problems in the oil, housing, consumer and financial sectors, according to Bove’s interpretation of Dimon’s presentation; there’s also likely to be more develeraging of the financial sector that will result in lower revenue potential and banks that won’t recognize losses fast enough. Dimon said that just about every type of consumer loan will deteriorate in quality, resulting in more losses at JPMorgan’s subprime and prime mortgage businesses, while the home equity portfolio will also deteriorate and credit card losses will grow.

Oppenheimer analyst Meredith Whitney also acknowledged that the credit card industry is headed toward rough days after she met with JPMorgan’s Gordon Smith, head of credit cards. Whitney, who holds a perform rating on shares of JPMorgan, said that Smith noted the company’s first bucket delinquencies are down year-over-year while other delinquency buckets are also seeing increased loss severity. Even though Dimon said Monday that JPMorgan expects credit card loss of about 5% in the second quarter, over 5% in the second half of 2008, and an average of 6% in 2009, Oppenheimer in fact believes the losses will be higher than JPM’s own expectations.

“JPMorgan believes that losses in the second half of 2008 will be mitigated by a higher denominator from a seasonal rise in balances, however we actually believe the opposite will occur,” Whitney said.

Still, as Bove pointed out, JPMorgan’s stock continued to rise Monday, even after the bearish comments from CEO Dimon. “Investors should listen to Mr. Dimon before rushing in to this stock,” Bove wrote. Investors did just that Tuesday, sending the stock down 2.5%.

Wall Street is on track for a lower open on Tuesday after Wal-Mart Stores Inc. offered a cautious second-quarter outlook, and investors await retail sales data and speeches from Federal Reserve officials led by Chairman Ben Bernanke.

Electronic Data Systems Corp. and Hewlett-Packard Co. also will supply an early focus as the two companies confirmed they were in talks about a possible merger.

According to spread bettors IG Index, the Dow Jones industrial average is expected to open down 34 points at 12,842. S&P 500 futures were off 4 at 1,400.70, while Nasdaq 100 futures dropped 3.75 to 1,994.75.

Wall Street rallied Monday as oil prices pulled back and alleviated some concerns about accelerating inflation. The Dow Jones industrial average rose 130.43, or 1.02%, to 12,876.31, the Nasdaq composite index climbed 42.97, or 1.76%, to 2,488.49, and the Standard & Poor’s 500 index advanced 15.30, or 1.1%, to 1,403.58. The yield on the benchmark 10-year Treasury note rose to 3.80% from 3.78% late Friday, and light, sweet crude oil fell $1.73 to settle at $124.23 per barrel on the New York Mercantile Exchange.

ECONOMIC DATA:

• Retail sales for April, 8:30 a.m. ET, -0.1% estimate
• Business inventories for March, 10 a.m. ET, 0.5% estimate
• Business sales for March, 10 a.m. ET, 1.0% estimate
• Investor’s Business Daily/TechnoMetrica Market Intelligence optimism index for May, 10 a.m. ET, 37.5 estimate

EARNINGS HIGHLIGHTS:

Company                 Symbol    Period     Estimate

Applied Materials        AMAT       2Q       $  .22
Dish Network             DISH       1Q          .52
Electronic Arts          ERTS       4Q         ....
Liz Claiborne            LIZ        1Q          .10
TJX Cos.                 TJX        1Q          .41
Time Warner Telecom      TWTC       1Q         (.03)
Wal-Mart Stores          WMT        1Q          .75
Whole Foods Market       WFMI       2Q          .30

Figures in parentheses denote losses.

AFTER-HOURS ACTION:

After Monday’s close of trading, Hewlett-Packard and Electronic Data Systems confirmed they are in advanced talks with over a potential business combination. Fluor Corp. said profit rose 63% in the first quarter. Sirius Satellite Radio Inc. reported a narrower first-quarter loss as revenue rose 33%, and Clearwire Corp. said its first-quarter loss nearly doubled on surging expansion costs.