Market Preview: Sick of the Cliff?

Higgins offered up two reasons though why going over the cliff mights not be the end of the world for equities.

"Of course, if the Democrats and Republicans fail to reach the sort of compromise that we foresee, then there could indeed be a major and lasting reaction in the stock market," he said. "But even under this scenario, the impact on the stock market might not be that dramatic for two reasons. First, not all investors pay the top rates of tax that Obama wants to see rise. And second, a growing share of US equities is sheltered from tax."

As for Friday's scheduled news, J.C. Penney (JCP) is slated to report its third-quarter results before the opening bell.

The department store operator, which is in the midst of a rocky turnaround effort under the leadership of former Apple exec Rob Johnson, is anticipated to post a loss of 7 cents a share on revenue of $3.27 billion. In the same period a year earlier, J.C. Penney earned 11 cents a share on revenue of $3.99 billion.

Since coming on board roughly a year ago, Johnson has sought to revamp the J.C. Penney brand, emphasizing low regular prices (no discounts) and a heightened fashion sense but the results so far have been a borderline disaster, as evidenced by a 21.7% drop in same-store sales in the second quarter.

The stock fell sharply on Thursday ahead of the numbers, losing 5% to close at $21.69. At that level, it's down 50% since hitting a 52-week high of $43.18 on Feb. 19. The majority of the sell side is bearish with 15 of the 21 analysts covering the shares at either hold (12) or underperform (3), and the median 12-month price target sitting at $25.

Check out TheStreet's quote page for J.C. Penney for year-to-date share performance, analyst ratings, earnings estimates and much more.

Other companies reporting quarterly results on Friday include CompuCredit (CCRT), E.W. Scripps (SSP), Energizer Holdings (ENR), Federal Signal (FSS), Foster Wheeler (FWLT), Ivanhoe Energy (IVAN), MGIC Investment (MGIC), NutriSystem (NTRI), and Warner Chilcott (WCRX).

Also on the corporate front, the pullback in Apple (AAPL) becomes a bigger topic for the broad market with every passing day's decline. The shares closed Thursday at $537.65, down 3.6% as it fell for a fifth straight session. Since hitting an all-time high of $705.07 on Sept. 21, Apple has lost nearly 24%.

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