Skip to main content



) -- The situation in Europe remains as muddled as ever but

stocks are still getting some mileage

out of optimism that Greece is crawling toward some semblance of stability.

The buyers can disappear pretty quick though, as evidenced by the speedy late-day drop from session highs in the major U.S. equity indices following a report of a

rift among Eurozone leaders on the terms of Greece's bailout

, so as usual, keep a sharp eye on the headlines.

Wednesday's big event looks to be the much-anticipated launch of a tablet computer by

(AMZN) - Get Free Report

. The Internet giant, which offers about everything these days, is looking to repeat the success it's enjoyed with the Kindle e-reader -- the company

said months ago it now sells more e-books than print books

-- but the retail price the tablet comes in at may be the biggest factor determining how this latest venture fares.

Amazon is likely to come in somewhere between


(AAPL) - Get Free Report

iPad 2, which starts at $499, and

Barnes & Noble's

(BKS) - Get Free Report

Nook Color at $249. Where in between, what features are offered remains to be seen. The big advantage for Amazon may be in how integrated the product is with its retailing, content streaming and cloud offerings.

That combination at the right price could present a value proposition compelling enough to be a real threat to Apple's tablet supremacy. The company's handling of the Kindle, consistently lowering the price while improving the product, offering free 3G and WiFi access, may be the blueprint for the tablet as well.

Amazon's stock has performed exceptionally well, still up nearly 30% so far in 2011, as topline growth has surged but it should be noted that net income hasn't come along for the ride yet as Amazon has been investing heavily. For its

second quarter ended June 30

, net sales soared 51% year-over-year to $9.91 billion but net income fell 8% to $191 million. Operating margin as a percentage of sales has fallen sequentially in the past three quarters, shrinking to 2% last quarter from 4.1% a year earlier. With a forward price-to-earnings multiple of nearly 70X, more than five times that of the

S&P 500

at roughly 12.5X, the stock is pricey, and the trend in margins will have to change eventually to support such a lofty valuation. Besides, how much lower can it go?

The earnings headliner on Wednesday is

Darden Restaurants

(DRI) - Get Free Report

. The Orlando, Fla.-based operator of the Red Lobster and Olive Garden concepts is reporting its fiscal first-quarter results before the opening bell, and the average estimate of analysts polled by

Thomson Reuters

is for earnings of 78 cents a share in the August-ended period on revenue of $1.93 billion.

Darden shares have also bucked the weakness in the broad market, closing Tuesday's regular session at $46.98, up 3% so far in 2011, although the stock has lost ground since hitting a 52-week high of $53.81 on July 22. The company has managed to beat the consensus view in four straight quarters but not by much, and commodity cost pressures have been an issue. On Sept. 6, Darden said it expects an in-line quarter, acknowledging a 2-cent impact from Hurricane Irene, and saying it's boosting its buyback target for the year.

At that time, the company said Olive Garden's sales were below expectations and expressed comfort with the low end of its full-year earnings outlook for EPS growth of 12-15%. Wall Street is still generally bullish on Darden with 24 of 30 analysts covering the stock at strong buy (12) or buy (12), but there will still be questions on the conference call about the company plans to get Olive Garden back on track.

Other notable reports on Wednesday include

Family Dollar Stores



Acutant Corp.



Mosaic Co.

(MOS) - Get Free Report

, which was recently added to the

S&P 500

, and

Thor Industries

(THO) - Get Free Report


Two tech names that should see heavy trading are

Jabil Circuit

(JBL) - Get Free Report

, which surged in late trades after blowing past Wall Street's earnings expectations; and

Research In Motion

( RIMM), which could see a pullback if

rumblings that Carl Icahn has the company in his sights

prove inaccurate.

As for economic data, durable goods orders for August arrive at 8:30 a.m. ET. The consensus is calling for an increase of 0.1%, but

is more optimistic, forecasting a rise of 0.5%. Excluding transportation, the estimates are for declines of 0.2% and 0.5% respectively.

In July, durable goods orders saw an overall bump of 4%, thanks to a big order for


(BA) - Get Free Report


AMR Corp.

(AMR) - Get Free Report

, the parent of American Airlines. Excluding transportation, orders rose just 0.8% in the prior month.

Crude inventories for the week ended Sept. 24 are also set to arrive at 10:30 a.m.


Written by Michael Baron in New York.


Jabil Circuit: After-Hours Trading

7 Tech Stocks With Limited Downside

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