Updated from 8 p.m. ET to include information on the after-hours trading session. NEW YORK ( TheStreet) -- Once again, the resilience of this market is evident even when stocks slide a bit. The S&P 500 has fallen in the past two sessions. This is just the fourth time this year that the index has strung together consecutive losses, with the longest such stretch coming at the end of January when it finished in the red four days in a row. On Tuesday, the modest selling was blamed on fears of a slowdown in economic growth in China sparked by comments from a mining company executive. Not exactly a disappointing jobs report. Wednesday's swoon was laid at the feet of Federal Reserve Chairman Ben Bernanke, who basically said that Europe isn't out of the woods yet. No surprise there. All told, the S&P 500 has lost roughly 7 points in the past two days, closing Wednesday at 1403. If that's what passes for a rough patch in 2012, the bulls have to be pretty pleased. The bait was there to cobble together an excuse for a healthy bout of profit-taking and very few traders stepped up and took it. Or else maybe they got wind of the rather poetic pro-stocks call from Goldman Sachs on Wednesday. The firm made a case for investors to leave bonds behind in favor of equities, dubbing the trade "the long good buy" and a "once-in-a-lifetime" opportunity. Retail investors though just aren't seeing it. Or at least they weren't a week ago when Mom and Pop continued to pull money out of long-term mutual funds investing in U.S. stocks for a fourth week in a row, despite the major U.S. equity indices conquering all those big, round numbers last week. According to the Investment Company Institute, funds investing in U.S. stocks saw outflows of $2.88 billion during the week ended March 14. Over the past four weeks, these funds have seen total outflows of $7.65 billion, while funds investing in bonds saw inflows of $42.49 billion. There's reasons aplenty to be at least a little nervous about getting caught in a downdraft of sudden selling. Top of the list has to be oil prices, which are already starting to weigh on the consumer with the average price of a gallon of gas approaching $4, but aforementioned concerns about China and Europe as well as a sloppy first-quarter earnings season set to start next month could also be the proverbial bad guy that brings this party to an end.
Meantime, S&P Capital IQ raised its year-end target for the S&P 500 to 1450 from 1400 late Wednesday but the firm included a smattering of caveats along with its call, saying that the unseasonably warm weather this winter may have juiced recent economic data and noting that six of the 10 sectors it tracks are expected to post a decline in profits year-over-year in the first quarter. It also broke down the impact of higher oil prices on consumers. "Gasoline, motor fuels, and fuel oil account for 5.5% of household spending, and rising," the firm said. "We think a $10 rise in crude oil prices will hike gasoline prices by about 25 cents (8%) and cut consumers' purchasing power by about 0.4%, causing 'staycations' to come back with a vengeance." As for Thursday's scheduled news, the earnings parade is set to pick up a bit, starting with FedEx ( FDX), whose quarterly reports always get a lot of attention because of the package delivery giant's status as an up-to-date indicator of the economy's health. The Memphis, Tenn.-based company is slated to open the books on its fiscal third-quarter results before the opening bell, and the average estimate of analysts polled by Thomson Reuters is for earnings of $1.35 a share on revenue of $10.6 billion. When reporting its second-quarter results back in mid-December, the company forecast earnings of $1.25 to $1.45 a share for the third quarter and reconfirmed an outlook for a profit of $6.25 to $6.75 a share for fiscal 2012. FedEx shares are up more than 13% so far in 2012, pushing the stock's forward price-to-earnings multiple to 12.8X. As of Wednesday's close at $95.82, the shares are closing in on their 52-week high of $98.66 set back in July 2011 after breaking out from both the 50-day and 200-day moving averages of $92.73 and $83.48 respectively. The sell side is very bullish with 21 of the 27 analysts covering the stock at either strong buy (11) or buy (10), and the 12-month median price target at $106. Citigroup was out with some commentary on FedEx Monday, lifting its target price to $110 while maintaining a buy rating and saying its channel checks indicate shipping activity has been robust.
Dahlman Rose, which has a buy rating on FedEx shares with a $104 price target, said Wednesday it's looking for "solid" results in the quarter but added that fuel costs could be a "mild headwind" and bear watching. "An improving macro environment in the U.S. and capacity adjustments in the company's international network should lead to solid earnings results," the firm said. "However, the fuel surcharge lag effect could weigh on earnings." From the bearish side of the ledger, Jefferies has a hold rating and $100 price target on FedEx and it's expecting fuel costs to exact a toll on the bottom line. The firm's estimate is for a profit of $1.33 a share in the third quarter, 2 cents below consensus, but it softened the blow by saying it expects FedEx will guide higher for its fiscal fourth quarter, helped by improving demand trends in Asia. "In a nutshell, we anticipate a modest F3Q miss on fuel (and despite strong productivity on an unseasonably warm winter and easy year-ago comps) but expect FDX to guide F4Q above consensus as the second derivative in Asian airfreight demand appears to be steadily improving and into low consensus expectations (F4Q consensus is $1.98 vs. $2.12 implied guidance, if we take the mid-point of the F3Q and F2012 guides)," the firm said. "All considered, we think the market would view this as a victory for FDX shares." Wall Street may also press FedEx management for an opinion about what the acquisition of TNT Express by rival United Parcel Service ( UPS) earlier this week means for the competitive landscape. Check out TheStreet's quote page for FedEx for year-to-date share performance, analyst ratings, earnings estimates and much more. Two other high-profile reports are also due from lululemon athletica ( LULU) and Nike ( NKE) on Thursday. Wall Street is looking for a profit of $1.17 a share on revenue of $5.82 billion from Nike in its fiscal third quarter, and the sneaker maker is under some pressure to deliver the goods. Its shares are up more than 40% in the past year, hitting a 52-week high of $112.97 on Tuesday. lululemon has an even higher bar to clear as its stock has risen nearly 90%, reaching its own 52-week peak of $74.57 on Wednesday. The average estimate of analysts polled by Thomson Reuters is for earnings of 49 cents a share from the yoga apparel purveyor in its fiscal fourth quarter on revenue of $362.4 million.
The sell side is split with 13 of the 25 analysts covering lululemon at either strong buy (5) or buy (8), and the rest divided between hold (11) and underperform (1), and the 12-month median price target sitting at $70. Jefferies isn't expecting the fourth-quarter numbers to be much of a market mover for lululemon since the company pre-announced in January, but it will be paying attention to the outlook for fiscal 2012. The firm, which has a hold rating and a $65 price target, said Wednesday it could see "a near-term hiccup" if the guidance is conservative. "We've heard CFO John Currie repeatedly direct investors to a 'long-term' 25% operating margin target," the firm said. "Anything near that in FY12 would yield EPS 10-15c below $1.60 consensus. With expectations high we would not be surprised to see the company create a lower/more beatable expectations bar." Other early reporters on Thursday include Bluefly ( BFLY), ConAgra Foods ( CAG), Deer Consumer Products ( DEER), Discovery Laboratories ( DSCO), Dollar General ( DG), Fred's ( FRED), Gamestop ( GME), Perry Ellis International ( PERY), Qiao Xing Universal Telephone ( XING), Talbots ( TLB), and UTi Worldwide ( UTIW). The late roster features Accenture ( ACN), Cost Plus ( CPWM), Gigamedia ( GIGM), Micron Technology ( MU), Steelcase ( SCS), and Wet Seal ( WTSLA). Thursday's economic calendar features the usual weekly initial and continuing jobless claims at 8:30 a.m. ET, the Federal Housing Finance Agency's housing price index for January at 10 a.m. ET; and leading indicators for February at 10 a.m. ET. The consensus, according to Briefing.com, is for initial claims to tick up to 355,000 from 351,000 last week. Claims have leveled off a bit in the past few weeks, but Ian Shepherdson, chief U.S. economist at High Frequency Economics, isn't worried. He expects little change from last week's number. "What matters is that the underlying trend is still downwards, and that the current level of claims is already low enough to signal robust gains in payrolls," he said. And finally, Discover Financial Services ( DFS) ticked lower in the after-hours session despite a better-than-expected profit in its latest quarter. The Riverwoods, Ill.-based company reported net income of $631 million, or $1.18 a share, for the three months ended in February, ahead of the average estimate of analysts polled by Thomson Reuters for a profit of 94 cents a share. Revenue came in at $1.84 billion, slightly above the consensus view of $1.82 billion. This may be a case of sell the news as Discover showed improvement in credit quality and card sales volume grew 7% year-over-year to $25.6 billion. The stock is up 36% in the past year, and started to pull back ahead of the report after hitting a fresh 52-week high of $33.20 on Monday. The shares dipped to $31.40 in the extended session after closing Wednesday at $31.64. -- Written by Michael Baron in New York. >To contact the writer of this article, click here: Michael Baron.