NEW YORK (

TheStreet

) -- Wednesday looks like it will be a

small victory

in what could shape up to be a long war for stocks.

The

Dow Jones Industrial Average

dodged a psychological bullet of sorts, avoiding what would have been its first nine-day slide since 1978 by rallying into the close to finish 30 points higher. The

S&P 500

climbed back into positive territory for the year.

That's all well and good for the moment but the forces arrayed against further appreciation in equities -- GDP growth slowing to a crawl, the housing and jobs markets showing scant signs of life, the

Federal Reserve

out of stimulus ammunition in the near-term, and the U.S. government trying to keep itself on a budget -- are formidable and intertwined.

Even with its recent pullback, the Dow is up more than 80% since its March 2009 12-year low. Whether this is the beginning of a correction or a consolidation will depend upon the economic data. Or as S&P put in a note late Wednesday, is this a

soft patch or quicksand

?

"From April 29 through August 2, the S&P 500 fell 8%, eclipsing the prior low on June 24 on yet an additional topic of concern: the increasing risk of recession here in the U.S.," S&P says. "Price declines of 5% or more aren't reason enough to signal recession, as there have been eight times as many of these than there have been recessions since WWII. But unrelenting price declines that are accompanied by weaker-than-expected GDP, ISM and jobs data add to existing concerns. Friday's Payrolls report should help us decide how high the risk of recession has risen."

Thursday brings a prelude to the federal government's July employment situation report on Friday in the form of initial and continuing jobless claims for the weeks ended July 30 and July 23, respectively at 8:30 am ET. The consensus is for initial claims of 405,000, but

Briefing.com

is a bit more pessimistic, putting the number at 420,000. Continuing claims are pegged at 3.7 million.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, is hopeful that the trend in initial claims is on the verge of improvement after last week's dip to 398,000, their lowest level since the first week of April.

"

If claims continue to head south, even if progress is slow and fitful, it would be hugely supportive of our view that the economy is in better shape than most investors and many commentators now seem to think," he writes, adding that claims will need to reach 350,000 to support a view for 3% GDP growth.

On the corporate news front, retailers will be flooding the wires with same-store sales reports for July on Thursday. The results so far are mixed with

Zumiez

(ZUMZ) - Get Report

coming in short of expectations, and

Hot Topic

( HOTT) happily overshooting the mark. Overall,

Thomson Reuters

is looking for comparable-store sales growth of 4.3% for the month, an improvement from a 2.8% increase in June.

"Summer vacation started, and the heat wave is luring an increasing number ofteenagers to shop at the malls," says analyst Jharonne Martis-Olivo in a preview. "As a result, positive SSS are expected across the board. Heavy discounting in June helped move inventory, and retailers are now facing clean levels for the back-toschool(BTS) season."

The sellers shouldering the biggest burden are the discounters, teen retailers and department stores with

Costco Wholesale

(COST) - Get Report

seen posting an 8.6% rise;

BJ's Wholesale

( PJ), pegged for an increase of 6.6.%; and

Saks

(SKS)

, projected to report a 8.5% boost. Still struggling

Gap

(GPS) - Get Report

is expected to deliver a 0.8% decline. With all the poor data of late, there's real risk of disappointment here. Those teenagers may have been forced to wait out the heat wave at home, wearing the clothes their parents are still paying off on their credit cards.

Thursday's earnings docket features

General Motors

(GM) - Get Report

, Dow component

Kraft Foods

( KFT), and recent IPO and social media superstar

LinkedIn

(LNKD)

.

GM has been

rolling along from an operational standpoint

, delivering a healthy beat in the first quarter, but the stock hasn't come along for the ride, falling more than 25% so far in 2011. The average estimate of analysts polled by

Thomson Reuters

is for earnings of $1.20 a share in the June period on revenue of $36.7 billion, sequential improvements on both counts.

Kraft's stock, on the other hand, has done well in 2011, rising 8.4% through Wednesday's regular session close at $34.30. Wall Street expects a profit of 58 cents a share for the quarter on revenue of $13.2 billion, and Kraft has cooperated with an upside surprise in seven of its past eight quarters. Higher commodity costs could take a chunk out of the bottom line this time around, but the bulls are still running for Kraft with 13 of the 20 analysts covering the shares at strong buy (8) or buy (5).

As for LinkedIn, it's the business networking site's first quarterly report as a public company and it needs to back up that 120% jump the stock's seen since its debut in March. The expectation is for a loss of 4 cents a share in the June quarter.

Notable a.m. reporters on Thursday will include

Abiomed

(ABMD) - Get Report

,

Apache Corp.

(APA) - Get Report

,

Cardinal Health

(CAH) - Get Report

,

Centerpoint Energy

(CNP) - Get Report

,

Church & Dwight

(CHD) - Get Report

,

Cigna Corp.

(CI) - Get Report

,

Cooper Tire & Rubber

(CTB) - Get Report

,

CVS Corp.

(CVS) - Get Report

,

Dean Foods

(DF) - Get Report

,

DIRECTV Group

(DTV)

,

Edison International

(EIX) - Get Report

,

El Paso Corp.

( EP),

Fortune Brands

( FO),

Gildan Activewear

(GIL) - Get Report

,

K-Swiss

( KSWS),

Lear Corp.

(LEA) - Get Report

,

Mobile Mini

(MINI) - Get Report

,

Olympic Steel

(ZEUS) - Get Report

,

PMI Group

( PMI),

SINA Corp.

(SINA) - Get Report

,

Southwest Airlines

(LUV) - Get Report

,

Sunrise Senior Living

( SRZ),

St. Joe Co.

(JOE) - Get Report

,

Timberland

( TBL),

Treehouse Foods

(THS) - Get Report

and

World Wrestling Federation

(WWE) - Get Report

.

Thursday's after-hours session will feature reports from

A123 Systems

( AONE),

Blue Nile

(NILE)

,

Brooks Automation

(BRKS) - Get Report

,

First Solar

(FSLR) - Get Report

,

Grand Canyon Education

(LOPE) - Get Report

,

Microchip Technology

(MCHP) - Get Report

,

Pitney Bowes

(PBI) - Get Report

,

Powerwave Technologies

(PWAV)

,

Priceline.com

(PCLN)

,

Rackspace Hosting

(RAX)

,

Rosetta Stone

(RST) - Get Report

, and

Sunoco

(SUN) - Get Report

.

And finally, condolences to

Dendreon

(DNDN)

shareholders. The stock

plunged more than 60% in late trades

on Wednesday after

sales of its Provenge prostate cancer drug disappointed

. The company is citing reimbursement issues and plans to lay off employees. Terrible timing all the way around.

--

Written by Michael Baron in New York.

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