NEW YORK (

TheStreet

) -- It feels like the skittishness is palpable on Wall Street right now, and that's never a good thing for retail investors.

Bank of America Merrill Lynch described the mood this way before Tuesday's sour session that pushed all three major U.S. equity indices back to

levels unseen since early February

.

"Investor sentiment is bearish on growth and risk, assets are allocated defensively and cash levels are high," the firm said early Tuesday. "But the dominant mood is one of paralysis as investors wait for a 'bad' event to provoke the policy panic and market capitulation that contrarians want to buy."

And while the idea that governments across the globe aren't doing enough to juice the system seems laughable to anyone that's paying attention, most asset managers think the politicians need to do more to encourage growth.

The latest BofA Merrill Lynch

fund manager survey

for May found 23% of respondents of the mind that global fiscal policy is "too restrictive" -- more than double the 11% tally for April. The poll was conducted from May 4-10 and involved a total of 234 panelists.

Greece is, of course, a bigger worry than ever with more than two-thirds of managers now expecting a "negative surprise" from the country in 2012, up from 48% last month. How much of a surprise a big negative from Greece would be at this point is debatable, but it's hard to escape that sinking feeling right now when it comes to stocks.

With the

S&P 500

breaking below support in the 1335-1340, B of A technical research analyst Mary Ann Bartels laid out where this downdraft could ultimately stall before giving way to a hoped-for summer rally.

"The equity market has been correcting the 32% rally from the October 2011 low to the April high," she wrote. "A one third to one half retracement of a rally is typical and this would put the S&P 500 in the range of 1300-1250."

Also worth watching: a strong dollar is usually a headwind for equities, and the greenback is on a tear right now with the euro starting to break down.

As for Wednesday's scheduled news,

Target

(TGT) - Get Report

is next up among the big retailers, slated to report its first-quarter results before the opening bell. The average estimate of analysts polled by

Thomson Reuters

is for a profit of $1.01 a share on revenue of $$16.86 billion in the April-ended period.

Shares of Minneapolis-based Target are up 7% so far in 2012, and the company already said on May 3 that same-store sales rose 5.3% in the first quarter, its strongest quarterly performance in more than six years, so there's reason to believe a fifth consecutive upside profit surprise is in the works.

The sell side is bullish with 15 of the 25 analysts covering the stock at either strong buy (5) or buy (10), and the 12-month median price target sitting at $65, implying potential appreciation of 18% from Tuesday's regular-session closing price of $55.08.

With a forward price-to-earnings multiple of 11.4X, the valuation for Target shares is roughly in line with the 11.3X multiple of Dow component

Wal-Mart Stores

(WMT) - Get Report

. There's a bigger disparity on dividend yield though with Wal-Mart's forward annual payout at 2.7%, besting Target's giveback of 2.2%.

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

Deere

(DE) - Get Report

is also reporting on Wednesday with Wall Street expecting earnings of $2.53 from the farm machinery manufacturer on revenue of $9.71 billion in its fiscal second quarter.

Jefferies has a hold rating and an $85 price target on Deere, and the firm thinks the bar is set pretty high for the company after strong numbers from

AGCO Corp.

(AG) - Get Report

and

CNH Global

(CNH)

. The firm is below consensus, expecting earnings of $2.50 a share on revenue of $9.6 billion, mainly because of margin headwinds.

"On its F1Q earnings call, DE indicated that it expects $400-500 mln in raw materials and transportation costs, including 2/3 of the total in 1H. F1Q saw $130 mln of headwind, and this implies another $130-200 mln in 2Q," Jefferies said, adding later: "Additionally, DE continues to transition lower horsepower products to iT4 compliant engines, and the associated R&D and new product expense could also dampen margins, particularly at C&F

construction and forestry."

The firm expects Deere to remain conservative in its guidance and estimates the company's initial forecast for 2013 farm cash receipts "could show a 5-10% decline given lower futures prices for new crop corn."

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

Other companies due to report on Wednesday are

Abercrombie & Fitch

(ANF) - Get Report

,

Abiomed

(ABMD) - Get Report

,

Advance Auto Parts

(AAP) - Get Report

,

Chico's FAS

(CHS) - Get Report

,

Citi Trends

(CTRN) - Get Report

,

Cost Plus

(CPWM)

,

Ctrip.com International

(CTRP) - Get Report

,

DryShips

(DRYS) - Get Report

,

Hot Topic

(HOTT)

,

Jack in the Box

(JACK) - Get Report

,

KongZhong

(KONG)

,

Limited Brands

(LTD)

,

Staples

(SPLS)

,

UTStarcom

(UTSI) - Get Report

.

The economic calendar is busy again on Wednesday with the Mortgage Bankers Association's weekly index of application activity at 7 a.m. ET; housing starts and building permits for April at 8:30 a.m. ET; industrial production and capacity utilization for April at 9:15 a.m. ET; weekly crude inventories at 10:30 a.m. ET; and then the release of the minutes of the last meeting of the Federal Open Market Committee at 2 p.m. ET.

And finally, there will be plenty of hand-wringing about

J.C. Penney

(JCP) - Get Report

after the initial feedback from the retailer's attempt to transform itself under CEO Ron Johnson came back negative.

The company's quarterly loss was wider than expected, its board discontinued the dividend, and its GAAP outlook was scrapped because of more restructuring charges are coming down the pike. The stock was last quoted at $29.25, down 12%, in the extended session, and it's going to be quite a feat for J.C. Penney bulls to put a positive spin on the progress so far.

Shares of

General Motors

(GM) - Get Report

will be revved up though on news that Warren Buffett and

Berkshire Hathaway

(BRK.B) - Get Report

took a significant stake in the company last quarter. GM also appears to have insinuated itself into what still looks to be the biggest story of the week --

Facebook's

IPO on Friday -- by reportedly stopping advertising with the company. Stay tuned.

--

Written by Michael Baron in New York.

>To contact the writer of this article, click here:

Michael Baron

.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.