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Market Preview: Searching for a Catalyst

Tony Dwyer, equity strategist at Canaacord Genuity, is much more bullish and he reiterated targets for the S&P 500 of 1575 for 2012 and 1650 for 2013 on Wednesday.

"The European Debt Crisis and recession, slowing growth in emerging economies, and fears of 'fiscal cliff' have priced in a recession that we continue to believe remains highly unlikely," he said while also echoing the old market saw, don't fight the Fed.

"The most important ingredient to our favorable fundamental outlook is a benign core inflation environment," he wrote. "Once we have that, it gives the Fed flexibility to use unique and unpredicted monetary tools to reach their desired goals."

As for Thursday's scheduled news, Ciena (CIEN) is slated to report its fiscal third-quarter results before the opening bell. The average estimate of analysts polled by Thomson Reuters is for a loss of 2 cents a share in the July-ended quarter on revenue of $473.9 million.

Shares of the Linthicum, Md. optical networker are up more than 40% so far in 2012, hitting a 52-week of $18.39 on Aug. 13. The company has a spotty track record on earnings day -- missing in four of the past eight quarters -- but it did deliver a surprise profit last time around.

The sell side is mostly bullish with 18 of the 25 analysts covering Ciena at either strong buy (7) or buy (11), and the 12-month median price target sits at $18, implying potential upside of 7.7% from Wednesday's close at $16.72.

Other companies on the light earnings docket include OmniVision Technologies (OVTI), Splunk (SPLK), and Zumiez (ZUMZ).

The economic calendar features weekly initial and continuing jobless claims at 8:30 a.m. ET; and personal income and spending for July at 8:30 a.m. ET.

Thursday is also same-store sales day for some retailers. Thomson Reuters is forecasting overall growth of 2.1% for August, down from an increase of 4.8% last year. Excluding the drug store sector, the expectation is for a jump of 4.1%.

"Analysts' reports show that mall traffic has been on rise towards the end of the month," the firm said on Tuesday. "Moreover, the Sales Tax Holidays brought parents and their children to the malls. As a result, analysts have become bullish on the Apparel sector, and have increased their SSS estimates to 5.0% from 4.4% at the beginning of the month."

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