NEW YORK ( TheStreet) -- The seesaw action driven by the latest headlines out of Europe continues, and it's a losing game to try to predict what side of this trade to be on day after day. Wednesday's action seems likely take its cue from Moody's decision to downgrade Spain's debt after market close, especially since the reports of cooperation between Germany and France to expand the eurozone's bailout fund that drove the rally on Tuesday were just that, reports. But then again, some official or another could come along with a mollifying statement and counter any worries about Spain that Moody's stirs up so the status quo of uncertainty across the pond remains intact. One thing's for sure though, that 7%-drop in Apple ( AAPL) flashing across screens in after-hours session will take a big fat chunk out of the Nasdaq if it holds. The excitement about Intel ( INTC) and its strong performance will only offset so much. In hindsight, this miss doesn't seem surprising at all. There was buzz about the iPhone 5 all summer, complete with rumblings of a fall or at least pre-holiday season launch. So how shocking is it that many of the consumers with the spare cheese to throw down for the smartest of the smartphones decided to wait until the next generation came along? Counting out Apple shares from rallying right back to pre-miss levels by the end of this week looks like a mistake from here. It's already known that the iPhone 4S is selling like the proverbial hot cakes, iPad sales were solid last quarter, Macs actually came in better than most analysts were expecting, and the guidance for the fiscal first quarter ending in December was solidly better than consensus, breaking away from Apple's tradition of doing the old shoe with performance promises. Expect Apple's many bulls on the sell side to be out pounding the table tomorrow. The phrase "buying opportunity" will be tossed around with impunity, which is bit of an oversimplification, as the stock was sitting at "priced to perfection" levels ahead of this nominal disappointment. The after-market close of $394.10 is still comfortably above where the stock closed as recently as Oct. 10 ($388.81) so it's really just giving back some of the pre-earnings ramp.
As for Wednesday, another avalanche of earnings reports is on the way. The notable in the morning rush include Abbott Laboratories ( ABT), Altria ( MO), AMR Corp. ( AMR), the parent company of American Airlines; Bank of New York ( BK), BlackRock ( BLK), Morgan Stanley ( MS), Northern Trust ( NTRS), PNC Financial Services ( PNC), Temple-Inland ( TIN), and Dow components Travelers ( TRV) and United Technologies ( UTX). The heavy hitters and momentum names after the closing bell are Dow component American Express ( AXP), Buffalo Wild Wings ( BWLD), Cheesecake Factory ( CAKE), E*Trade Financial ( ETFC), eBay ( EBAY), Riverbed Technology ( RVBD), Stryker ( SYK), Tractor Supply ( TSCO), and Wynn Resorts ( WYNN). Riverbed Technology gets the highlight treatment here. The average estimate of analysts polled by Thomson Reuters is for earnings of 21 cents a share in the September period on revenue of $185.3 million. An in-line performance would add up to flat earnings despite a slight revenue boost on a sequential basis. Based on Tuesday's close at $23.18, Riverbed shares are off more than 35% so far in 2011, and it's been a steady progression lower since a sharp selloff on July 19 after the second-quarter report, which included a slight revenue miss. The stock bottomed out with the rest of the market on Oct. 4, scraping a low of $18.33, before bouncing ahead of the earnings release. ThinkEquity, which has a buy rating and a $35 price target, was bullish in its preview of the quarter on Oct. 14, saying it expects at least in-line profit after strong channel checks of Riverbed's government business. "While we remain cautious about the worsening macro outlook in Europe and sluggishness in financial services globally, after our strong US Federal checks, we are incrementally more confident in RVBD's ability to at-least meet consensus 2H11 estimates in its report and guide scheduled for next week," the firm said at the time. "With the stock reflecting a potential miss and guide-down in our view, we believe an in-line quarter is likely to restore investor confidence in RVBD's growth story, the datacenter consolidation secular trend and RVBD's continued strong positioning in its core WAN Optimization market and hence we recommend buying, especially ahead of the print," ThinkEquity added. The firm sees a pretty good surge in the stock if it can meet the consensus view, and believes downside is limited because of the low expectations.
"In the scenario that the company meets consensus estimates, we believe shares could rally sharply and we see near-term potential upside at least to the high-20's (= $3.65 cash + 25x*$1.10 CY12 consensus estimate ~ $30)," ThinkEquity said. "In the unlikely event of a miss, we estimate the potential downside at $16 (= $3.65 cash +15*$0.80 ~$16). With at least a $8 potential upside and $5 potential downside, we recommend investors buy RVBD shares, particularly ahead of the quarter." The rest of the scheduled news on Wednesday consists of the consumer price index, housing starts, and building permits for September at 8:30 a.m. ET; the Mortgage Bankers Association index of application activity for the week ended Oct. 15 at 7 a.m.; the Federal Reserve's Beige Book report for October at 2 p.m. ET, and crude inventories for the week ended Oct. 15 at 10:30 a.m. -- Written by Michael Baron in New York. >To contact the writer of this article, click here: Michael Baron. >To submit a news tip, send an email to: firstname.lastname@example.org