NEW YORK ( TheStreet) -- In order to avoid veering into broken record territory, the easiest thing to do may be to just hand this intro off to SP Capital IQ, which offers up this apt description of the current state of stocks and Europe's wild card status.

"Like pulling petals from a daisy, the U.S. equity markets rise one day, only to fall the next, on headlines announcing the likely success or failure of a European sovereign debt solution," the firm says in commentary late Wednesday.

That sounds about right. The major U.S. equity indices all slumped Wednesday with the Nasdaq getting the worst of it after Apple's ( AAPL) nominal disappointment, but trading was pretty sluggish and late-day news that France and Germany aren't definitively on the same page just yet, along with a thoroughly predictable downbeat assessment of economic conditions from the Federal Reserve, was enough to spook investors.

The Dow, Nasdaq and S&P 500 have all snapped back very quickly from their Oct. 4 intraday lows, so there may be a bias to go lower in the near-term with traders possibly looking to offset some ugly losses suffered in August's storm of volatility with the quick gains of the past two weeks. Earnings season has been hit-or-miss so far, and it's getting tiresome to keep wondering if and when Europe's leaders are going to be able to get it together once and for all.

As for Thursday, Dow component Microsoft ( MSFT) is set to report its fiscal first-quarter results after the closing bell. The average estimate of analysts polled by Thomson Reuters is for earnings of 68 cents a share in the September-ended quarter on revenue of $17.24 billion.

Bill Gates' software behemoth doesn't have the cool factor of Apple ( AAPL) or Google ( GOOG), but the company just keeps chugging along. Heading into this report it's got a streak of eight straight quarterly beats on the line with the average upside surprise at 15.4%. Pretty impressive. Revenue totaled $69.9 billion for the company's fiscal year ended in June, up nearly 12% from the prior year's total of $62.5 billion, so it's finding a way to grow a massive top line in a weak economy.

Microsoft's stock is up a respectable 9% in the past year (down 3% so far in 2011 though), and its forward price-to-earnings ratio sits at around 9X, cheaper than the S&P 500 at 12X. Another point in the company's favor.

Other attractive qualities include having more than $51 billion in cash ($6.13 per share) on the balance sheet, and enough of a sense of a humor to admit to having dodged a bullet by not acquiring Yahoo! ( YHOO) a few years back.

Wall Street is bullish with 22 of the 33 analysts covering the stock at strong buy (12) or buy (10), and the 12-month median price target sits at $32, implying potential upside of 18% from Wednesday's regular session close at $27.13.

Collins Stewart, which has a buy rating and $33 price target, previewed the report on Wednesday, saying strength in the business PC refresh cycle should be enough to offset any softness on the consumer side. The firm expects results to be "broadly in line" with the consensus view, and notes the recent completion of the Skype acquisition will likely cause Microsoft to pare down full-year guidance a bit.

"PC market data points suggest a continuation of several trends for the first half of this year, with weakness in consumer demand in developed markets being offset by growth in businesses and in emerging markets," Collins Stewart said. "Still PCs should show improving Y/Y growth relative to recent quarters, as Gartner last week indicated PC market growth of 3% (versus a 2% Y/Y decline in the first half of C2011), and comparisons ease more so for MSFT in future quarters."

The firm also wondered aloud whether investors will start to think about moving past the idea that tablets are such a big threat to Microsoft.

"With progress in PCs against the backdrop of continuing solid tablet sales, investors could begin to re-think the degree to which tablets cannibalize PCs, which we think has been the single biggest reason for MSFT's multiple compression in the last two years," Collins Stewart said.

Dow component AT&T ( T) is the headliner before the opening bell, and the average estimate of analysts polled by Thomson Reuters is for earnings of 61 cents a share in the September-ended quarter on revenue of $31.6 billion. The word that comes to mind with AT&T is flat. Earnings have been stuck between 55 and 61 cents for the past six quarters with revenue between $30.5 billion and $31.5 billion. The current consensus view is at the top of that range, but not indicative of growth.

The stock is flat as well, down less than 1% this year, prior to Wednesday's tick lower. The shares have stayed in a range of less than $5 over the past year, and have lost more than 8% since hitting a 52-week high of $31.94 in early May. Wall Street is still bullish though with 18 of the 32 sell-side analysts covering the shares at either strong buy (9) or buy (9), and the median 12-month price target at $32.25.

The morning rush of reports will also feature Alaska Air Group ( ALK), BB&T ( BBT), Blackstone Group ( BX), Boston Scientific ( BSX), Danaher ( DHR), Eli Lilly ( LLY), Fifth Third Bancorp ( FITB), KeyCorp ( KEY), New York Times ( NYT), Nokia ( NOK), Philip Morris International ( PM), Southwest Airlines ( LUV), and Union Pacific ( UNP).

Aside from Microsoft, the other notable names reporting after the close include Acme Packet ( APKT), Chipolte Mexican Grill ( CMG), Chubb ( CB), Compuware ( CPWR), Rambus ( RMBS), SanDisk ( SNDK), Seagate Technology ( STX), and Tempur Pedic International ( TPX).

Thursday is a busy day for economic data as well. In addition to the usual weekly jobless claims numbers at 8:30 a.m. ET, the market will get existing home sales for September, the Philly Fed regional manufacturing activity survey for October, and leading indicators for September, all at 10 a.m. ET.

Initial claims for the week ended Oct. 15 are expected at 403,000, according to the consensus estimate compiled by, a tick down from 404,000 last week, so really just more of the same. The Philly Fed number is still expected to be negative at -8.8 but that would be a fair improvement from -17.5 last month.

While getting another solid read on existing home sales, say sticking above 5 million, would be a step in the right direction, it's still way too early to get excited about housing. The consensus is for a decline to 4.92 million from 5.03 million in the previous month, but's own view is stronger, estimating a total of 5.1 million.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, says all four datapoints could attract attention from the markets on Thursday but tabbed the jobless claims as most interesting to him at this juncture.

"We expect the usual modest upward revision to last week's 404K, and a 410-415K print for the latest week," he said. "The trend in claims has clearly nudged higher from the spring lows but with third quarter growth looking to have been about 3%, it's hard to see why companies would now be rushing to let people go."

Shepherdson also weighed in on the Philly Fed survey, saying he sees some improvement but nothing all that significant.

"We think the spring and summer rollover in business confidence has finished, but we don't yet see much evidence that a real rebound is underway," he wrote.

-- Written by Michael Baron in New York.

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

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