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) -- Judging by the

action so far this week

, Wall Street evidently believes Ben Bernanke is the man with the plan.

After all, even the

odd earthquake on the East Coast

couldn't derail the buying.

The contrarian view is that stocks were oversold after the bloodbath of the past four weeks, and there's some easy hay to be made running stocks up a bit ahead of the

Federal Reserve

chairman's speech on Friday.

Capital Economics

on Tuesday was one of the

many voices this week

talking about the diminishing returns to be expected if the central bank embarks on more fiscal stimulus.

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The research firm said it would be surprising if Bernanke didn't at least mention the prospect of more quantitative easing as a potential policy option but investors shouldn't expect the stock market to respond as it has in the past.


The failure of the economy to regain health over the past couple of years should have undermined investors' confidence in the medicinal properties of QE," Capital Economic wrote, adding later: "There is little reason to expect it to warm in the event of QE3 unless the Fed acted much more boldly than it has in the past."

The Dow is now up in six of the past nine sessions and has booked a gain of 3.2% already this week. It'll be interesting to see when the bets start getting hedged ahead of the Fed chairman's ascendance to the podium in the shadow of the Grand Tetons. It's a good bet that there's still some room to run given the strong buying into the close on Tuesday but the fundamental concerns that have spurred all this volatility of late haven't been allayed.

Wednesday brings data on durable goods orders for July at 8:30 a.m. ET, and the consensus is calling for an increase of 1.9%.

itself is a bit more optimistic, setting its sights on a 2.5% boost.

Capital Economics

sees an overall increase of 3.5%, a nice rebound from a decline of 1.9% in June, saying strong aircraft orders for



should provide the punch. Excluding transportation, however, the firm thinks core orders may have fallen as much as 1.5% month over month. The consensus is for a decline of 0.6%.

The other economic data on Wednesday includes the Mortgage Bankers Association's weekly applications index at 7 a.m. ET, the Federal Housing Finance Agency's housing price index for June at 10 a.m. ET, and crude inventories for the week ended August 20 at 10:30 a.m. ET.

The big earnings report comes late Wednesday when semiconductor capital equipment maker

Applied Materials


offers up its fiscal third-quarter results. The average estimate of analysts polled by

Thomson Reuters

is for a profit of 33 cents a share for the three months ended July on revenue of $2.68 billion.

The stock is down nearly 23% so far this year, and most of Wall Street has soured on the company with 14 of the 22 analysts covering the shares at either hold (12) or underperform (2). When it reported its second-quarter results on May 24, the company forecast non-GAAP earnings of 31 to 37 cents a share and a sequential drop in sales of 3-10% for the third quarter.

Investors will be expecting more color on how Applied Materials plans to integrate

Varian Semiconductor


once its $5 billion cash acquisition closes in the second half of the year, and be listening from a timeline on the return of top-line growth.

Other notable quarterly reports on Wednesday include

American Eagle Outfitters






Guess Inc.





, and

Toll Brothers



And finally,

Bank of America


was in the barrel again on Tuesday as questions about potential capital needs continue to persist. According to

The Wall Street Journal

, J.P. Morgan debt analysts

have put out a note

estimating the bank may need to raise between $12 billion and $25 billion, a prospect the firm thinks is doable.

The prospect isn't exactly a positive catalyst for the stock but maybe biting the bullet and raising some additional capital will provide some clarity and stop the bleeding.


Written by Michael Baron in New York.




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