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Market Preview: Smart Money Skeptics

Stocks in this article: CSCO TGT JDSU AMZN SPY ^GSPC ^IXIC ^DJI

The current market mood is likely to remain blaséfor the next few weeks as summer winds down and vacations days get used up. Bloomberg highlighted the low volume that U.S. stocks saw Monday, saying it was the slowest day in five years.

Until the New York Stock Exchange and Nasdaq can muster a few days with five billion-plus combined shares changing hands, it'll be difficult to get a bead on whether investors are really buying into this latest move, or looking to take some money off the table.

As for Wednesday's scheduled news, Cisco (CSCO) is set to report its fiscal fourth-quarter results after the closing bell. The average estimate of analysts polled by Thomson Reuters is calling for the Dow component to post earnings of 45 cents a share in the July-ended period on revenue of $11.6 billion.

The stock has been a loser in 2012 as the networking equipment giant continues to work through a massive restructuring, most recently announcing another round of layoffs, eliminating 1300 jobs, or 2% of its workforce, in late July. Through Tuesday's close at $17.17, the shares are down 5% year-to-date and more than 19% since hitting a 52-week high of $21.30 on April 2.

The majority of Wall Street remains bullish about Cisco with 28 of the 46 analysts covering the stock at either strong buy (11) or buy (17), and the median 12-month price target at $22, implying potential upside of 28% from current levels.

Sterne Agee previewed the quarter on Tuesday, saying it expects mixed results from the company but that the stock looks favorably priced at current levels with Wall Street pricing in some concern about the outlook because of longer sales cycles and the uncertainty in Europe, which generates more than 25% of the Cisco's revenue. The firm has a buy rating and a $23 price target on the shares.

"Based on our supply chain work, we anticipate revenue to be in-line or slightly below consensus at $11.6 billion but EPS to be in-line or better at $0.46," Sterne Agee said. "For its outlook, we expect guidance to be in-line or slightly below. From our investor feedback, we believe CSCO shares have a positive bias at these levels as expectations appear fairly modest where most anticipate conservatism given macroeconomic concerns."

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