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Despite some very tame inflation reports, the housing data was deemed as a disappointment. Investors used today's early strength to sell stocks to lock in profits or to take at least some money off the table. Of the five DJIA components which reported earnings, the pre-earnings gains were astounding on most of them.

Here were today's unofficial closing bell levels:

Dow 10,041.48 -50.71 (-0.50%)
S&P 500 1,091.07 -6.84 (-0.62%)
Nasdaq 2,163.47 -12.85 (-0.59%)

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Yum! Brands (NYSE: YUM), which competes with McDonald's (NYSE: MCD), Burger King (NYSE: BKC), and Wendy's/Arby's Group (NYSE: WEN) for the right to feed consumers on the go around the world, issued a Q3 report after the bell on Tuesday that was decent in many respects. Earnings per share on an adjusted basis increased over 20% to 70 cents. This performance absolutely embarrassed the analysts, who were looking for a mere 58 cents per share according to our earnings preview.

So, that was one of the decent parts. Actually, I'd say it was a little more than decent. But, unfortunately, the top line didn't grow. Total revenues actually declined 2%.

At the time of this writing, shares of Yum! Brands (NYSE: YUM), a company that competes with McDonald's (NYSE: MCD), Burger King (NYSE: BKC), and Wendy's/Arby's Group (NYSE: WEN), were trading higher by well over 4%. Volume was doing well, too. Interestingly enough, Yum! Brands will be reporting Q3 earnings on Tuesday, October 6, after the bell. Does this mean that you should buy in ahead of the release?

On the surface, I suppose the market is telling you that Yum! Brands would indeed make a good earnings trade. Not only is the stock up nicely this afternoon, but it isn't too far from a 52-week high.

If you're trying to get your head around some stock strategies for the upcoming fall trading season, you might want to consider dividend yields. Volatility could increase since we've had such a run-up in many equities, so thinking about payouts is probably advisable.

I was looking around for some higher-yielding blue chips and became interested in McDonald's (NYSE: MCD). As of last Friday's closing price, McDonald's yields almost 3.6% on an annual basis. It pays out 50 cents per share per quarter according to its corporate website.

TheStreet.com's Jim Cramer says even stocks without exposure to that country will probably be on sale today.

If China has pulled back 20%, do we have to pull back 20%, even though they were up 80% and we are up 9%? Are we so in lock step now that when China catches a cold, we are the ones with pneumonia?

I don't think so. It's such an easy story to stretch out, though you can see that our Freeports (NYSE: FCX) (Cramer's Take) and our Exxons (NYSE: XOM) (Cramer's Take) can get hammered.

Yum! Brands (NYSE: YUM), a chain of restaurant trademarks that competes with McDonald's (NYSE: MCD), Burger King (NYSE: BKC), and Wendy's/Arby's Group (NYSE: WEN), delivered up a nice hot serving of earnings on Tuesday after the bell.

For the second quarter, net sales dropped 7%. Earnings on an adjusted basis increased 10% to 50 cents per share. This was actually much better than analysts' expectations. Wall Street was only counting on 43 cents per share, according to Bloomberg. However, the market is always looking forward, so there was a bit of bad news in terms of guidance pertaining to same-store sales.

Sonic (NASDAQ: SONC), a fast-food chain whose colleagues include Burger King (NYSE: BKC), McDonald's (NYSE: MCD), Wendy's/Arby's Group (NYSE: WEN), and Yum! Brands (NYSE: YUM), reported earnings for the third quarter on Tuesday after the bell. The shares have done well today on the news. As I write this, Sonic's stock is up well over 12% in afternoon trading. Volume is great. Do you want to get in on the action?

Sonic said it earned an adjusted 24 cents per share. This article reported expectations as being $0.20 per share, so management beat the bottom line by a nice amount. We'll throw that result on the positive side of the line.

Burger King (NYSE: BKC), a fast-food joint that competes with McDonald's (NYSE: MCD), Yum! Brands (NYSE: YUM), and Wendy's/Arby's Group (NYSE: WEN), issued its Q3 report on Wednesday. The top line didn't do much, rising only 1% in the face of difficulties with currency translations. Earnings came in at 34 cents per share. That was one penny better than Wall Street's expectations, according to Reuters.

It's always good to beat the earnings call. But Burger King didn't get much mileage out of that victory. The stock actually sold off 3% on the news, closing yesterday at a fresh 52-week low of $16.55. The big catalyst was the conservative fiscal-year guidance.

Wendy's/Arby's Group (NYSE: WEN), a fast-food company that competes with McDonald's Corporation (NYSE: MCD), Burger King (NYSE: BKC), and Yum! Brands (NYSE: YUM), reported earnings for the fourth quarter on Monday. Call me unimpressed.

The chain earned $0.05 per share on an adjusted basis. According to this article, the results matched expectations. I don't begrudge Wendy's/Arby's for doing that in such a tough marketplace. But I do begrudge the weakness in the Arby's brand. Systemwide same-store sales at Wendy's were up 3.7% in Q4, while systemwide comps at Arby's were down a terrible 8.5%. Arby's is having problems attracting people with its current menu portfolio. The value menu at Wendy's, on the other hand, seems to be a strategy that is working. Customers are coming in, ready to get a deal on those delicious, although not-so-healthy, square-shaped burgers. So, if the company wants to improve its situation, it's going to have to get serious about fixing Arby's.

Burger King (NYSE: BKC), a famous fast-food joint that competes with McDonald's (NYSE: MCD), Yum! Brands (NYSE: YUM), and Wendy's/Arby's Group (NYSE: WEN), reported earnings for the fiscal second quarter on Thursday. Net sales decreased 3%, and net income dipped 8% to $0.33 per diluted share. The call was for $0.37 per share.

It's good to be the King, but it's not good to miss your earnings forecast. Yes, we shouldn't always pay attention to the analysts and their game, and it's certainly difficult these days to make forecasts anyway, but it's always nice to see a company at least hit the ballpark in terms of consensus.

The press release cited concerns with currency translations, so that's something for shareholders to keep in mind. But the release also cited something that I think is one of the best elements of the Burger King story: its marketing campaigns. Management was happy to congratulate itself on being highlighted by trade journal Ad Week. I know, it's just corporate bragging in an earnings document, who needs that, right? While that may be true, I do honestly believe that Burger King's TV spots have definitely built a loyal following among the valuable youthful demos, and that the campaigns, which have included that creepy royal mascot, are indeed responsible for growth. And those Whopper Virgins commercials were pretty funny, too.

Yum! Brands (NYSE: YUM), whose competitive colleagues include McDonald's Corporation (NYSE: MCD), Burger King Holdings Inc. (NYSE: BKC), and Wendy's Arby's Group (NYSE: WEN), reported earnings for Q4 and the full fiscal year on Tuesday after the bell.

Net sales increased 4% for the quarter to $3.4 billion, and earnings per share on an adjusted basis went up 5% to $0.46. According to the earnings preview, sales essentially met Wall Street's view, but net income was beat by a penny. For the year, Yum! saw a net sales increase of 8% to $11.3 billion, and its adjusted bottom line increased by 14% to $1.91 per share. Once again, sales were in-line, and earnings beat by the proverbial penny.

Wendys Arbys Group's (NYSE:WEN) Wendy's Restaurant's second foray into the breakfast business appears to have failed, sending the company back to the drawing board, and leaving McDonald's (NYSE:MCD) as the clearly dominant player in the drive-through morning business. According to Advertising Age, Wendy's CEO Roland Smith told attendees at an industry conference that the company had decided that the breakfast offering have fallen short of its expectations, both in quality and profitability.

Wendy's has been carrying out a test of breakfast offerings for two years already. In this instance, I suspect that 'test' was a way of couching the rollout so that the company did not have to face the embarrassment of franchisees refusing to open for the breakfast trade. Since the breakfast 'test' was not carried out in all units, it could not be supported by a national ad campaign, a weakness that surely impacted traffic.

The company plans to overhaul the menu, a step badly needed, imho. McDonald's has set the bar very high, offering high-quality fare such as hotcakes, biscuits and English muffins. Wendy's alternatives, which I had the occasion to sample a couple of times, seemed second-rate by comparison, made worse when low traffic volume resulted in less than fresh ingredients.

Given the saturation of the drive-through burger industry, I expect that Wendy's will indeed return again to the breakfast wars in an attempt to increase returns per unit. Finding an identity and the money to elbow its way into the market, however, will be difficult tasks.

Other Wendy's stories

Burger King Holdings, Inc. (NYSE: BKC), which competes with Yum! Brands (NYSE: YUM), Wendy's/Arby's Group (NYSE: WEN), and, of course, McDonald's Corporation (NYSE: MCD), reported earnings today for the first fiscal quarter. The statistics show that, well, it kind of is good to be the king. I won't say these are the biggest growth numbers I've ever seen, but I thought they showed that the fast-food entity is doing well serving its core customers.

Revenues jumped 12%. On a global basis, comps jumped 3.6%, which management points out is the 19th time in a row that global comps were in positive-growth territory. I know, that's the kind of managerial cheerleading that an investor must be careful about, but I think it's a cool fact in this case. Domestically, comps advanced 3%, and, well, it's the 18th time in a row for that metric, if you care. Adjusted net income came in at $0.38 per share, a 9% increase. This is where the creepy Burger King mascot sheds a tear, because that was one penny below the expectations of the analyst wizards who populate the kingdom of Wall Street (according to Melly Alazraki's Before the Bell article from earlier today).

Although Burger King didn't please the analyst community, I thought this was a good quarter. The release said that the company purchased some stock and paid a dividend, all of which was covered by cash generated from operations. Management seems to be amply aware of the stresses that the economy is going to put on its patrons and is studying pricing strategies. That's the problem for every purveyor of foodstuffs. People aren't so keen about paying up for stuff these days, so how do you get them to do it? Costs and currency fluctuations are affecting many companies, and they won't have an easy go of it as the recession continues its march of pain (even with the recent upward moves in the stock market, I'm not that bullish just yet). So, even though I like Burger King's Q1, and even though I think it's a great marketer of its menu items (the youth really dig that creepy Burger King character), I'll concede that the stock could be volatile in the coming months. Long-term, though, it should be a good investment.

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

McDonald's (NYSE: MCD), which competes with Burger King (NYSE: BKC), Wendy's/Arby's Group (NYSE: WEN), and Yum! Brands (NYSE: YUM), will be reporting earnings for the third quarter tomorrow. I have a feeling many shareholders will be resting easy this week. I don't think McDonald's will have a big earnings miss.

According to Earnings.com, Mickey D's should earn 97 cents per share. If management can meet those expectations, that's earnings growth of about 17%. That's tasty in this market. Here's the kicker: McDonald's beat earnings estimates the last two quarters by wide margins. Will the company do the same thing this week? I think there's a decent chance it will. Even though there's a bear market going on, gas prices have been dropping, and you figure that has to be good for the drive-thru. Plus, there's that affordable-menu option that has driven a lot of brand equity over the last several years for the fast-food giant. I'm sure many patrons appreciate that in a tough period.

Besides earnings, investors will focus on same-store sales. That metric is one of the best indicators of a company that is made up of many locations. It's really no different than retailing. I'll be interested to see how the domestic market is faring compared to the international markets. Another thing I'll be interested in seeing is how inflation is affecting Ronald and his empire. We all know that Ronnie is a clown who likes to bestow happiness among all his customers, but reality likes to ruin parades every now and then. In this case, McDonald's has to keep a constant eye on the issue of pricing.

Yum! Brands (NYSE: YUM) reported earnings for the third quarter after the bell on Tuesday. Revenue went up 11% to $2.8 billion. Earnings per share rose 16% to $0.58. Global comps increased 3%.

You know, those numbers are not bad at all. As we await earnings reports, I'm sure that you, like me, are nervous. I mean, we're in the middle of a global economic slowdown fueled by a financial-system collapse, so the data this quarter is going to be particularly telling. The fact that Yum! has double-digit growth to its credit is pretty cool to see.

No, that doesn't mean I'm a bull on the markets all of a sudden, but it does show that people are still stopping by Pizza Huts and KFCs. Guess people won't give those guilty pleasures up during the monetary apocalypse, huh? And let's look at Yum!'s cash flow. While net cash from operating activities year-to-date was pretty much flat at $1.1 billion, it was more than enough to cover the capital spending and dividend obligation. As you can imagine, management highlighted the nice cash-flow generation of Yum!'s business. During a market crisis, it's the thing to do.

According to this source, Yum! beat by four pennies. Shareholders will be pleased by that, and perhaps the shareholders of Burger King (NYSE: BKC), Wendy's/Arby's Group (NYSE: WEN), and McDonald's (NYSE: MCD) can take Yum!'s performance as a good omen for their companies. I can't say that Yum! Brands is going to rocket from here based on the earnings news. But I can say that long-term investors with a lot of patience should have a winner on their hands based on the brand equity of the company and its cash-flow-generating abilities.

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