NEW YORK ( TheStreet) -- The slow meltdown may have finally begun.

Both the S&P 500 and the Dow Jones Industrial Average have fallen in five of the last seven sessions, and it took Federal Reserve Chairman Ben Bernanke keeping the QE3 flame alive to keep the overall losses from stacking up over that stretch.

Now the economic data is showing some cracks after less-than-impressive readings on consumer confidence and durable goods orders the past two days, and a first-quarter earnings season that promises minimal, if any, profit growth is looming as Alcoa ( AA) due to kick things off April 10, followed shortly after by the big banks with JPMorgan ( JPM) opening its books on April 13.

Ed Yardeni, chief investment strategist at Yardeni Research, took a forward-looking view of the markets on Wednesday, moving up his year-end forecast of 1450-1550 for the S&P 500 to the end of summer. The index closed Wednesday at 1405.54.

"If the economy falls off a fiscal cliff in 2013, so will earnings," he wrote in emailed commentary. "The question is when might the stock market start to discount such a scenario? Investors are likely to do so well ahead of industry analysts, who probably won't lower their earnings estimates until company managements tell them that they are going over a cliff. In my opinion, the fiscal cliff scenario won't be an issue for the market until right after the summer, when investors are likely to focus more of their attention on the political races."

After the summer, Yardeni said: " A ll bets are off given the uncertainty about fiscal policy. I have to believe that the lame ducks in Congress will pass temporary measures that postpone the fiscal cliff scenario until the new Congress has a chance to address the mess early in 2013."

As for Thursday's scheduled news, Best Buy ( BBY) is the big name reporting its quarterly results before the opening bell, and the average estimate of analysts polled by Thomson Reuters is for a profit of $2.16 a share on revenue of $17.2 billion in the February-ended period.

Best Buy shares have bounced more than 15% so far in 2012, but are still off nearly 8% in the past year, pushing the forward price-to-earnings multiple down to 7.2X. The Minneapolis-based consumer electronics retailer reaffirmed its outlook for adjusted earnings of $3.35 to $3.65 a share in fiscal 2012 on Jan. 6 but said revenue of $8.4 billion for December was "slightly lower" than expectations because customer traffic was slow until the last week before Christmas.

At that time, Best Buy said demand for products like eReaders and tablet computers was robust, but that it recorded year-over-year declines in same-store sales in categories like gaming, digital imaging and televisions.

The sell side is skeptical of the stock, understandably so since Best Buy has fallen short of the consensus view in the past two quarters. Twenty-two of the 27 analysts covering the shares are bearish at either hold (19), underperform (1) or sell (1), and the median 12-month price target of $27 vs. Wednesday's regular-session close at $26.62 implies a view that the valuation is stretched despite the low P/E vs. names like Target ( TGT) at 12.1X and even Wal-Mart ( WMT) at 11.6X.

UBS kept a neutral rating on Best Buy on Wednesday but lifted its price target to $27 from $25, saying it expects the company to announce more steps to reduce costs.

"While BBY has already committed to a 10% big box square footage reduction, we think it can go further," the firm said. "We calculate a 20% reduction in total square footage while increasing store labor to 3.6 associates per 1,000 square feet (vs. 3.1 last year) would generate $1+ in EPS (25% accretion). We think a bold step such as this would change the narrative on the story and the debate would turn to whether or not it can work."

Saying the stock's valuation "may depend on how bold it Best Buy is willing to be," UBS noted that its checks have found the company is being more aggressive on television pricing, narrowing the gap with Amazon.com ( AMZN) that's caused weakness in the category. The firm is expecting earnings of $2.19 a share, three cents ahead of consensus, as it's anticipating gross margin improvement will offset continued deceleration in U.S. sales.

Check out TheStreet's quote page for Best Buy for year-to-date share performance, analyst ratings, earnings estimates and much more.

Research In Motion ( RIMM) will grab all the headlines after the close. The troubled Canadian company is in virtual limbo at the moment as it works toward the release of its next-generation handset in the second half of this year, the BlackBerry 10. The stock reflects the uncertainty, dropping 4% in 2012 as the broad market has rallied and 75% in the past year.

Wall Street's dissatisfaction about Research In Motion are well-documented, but investors can take some slight solace in the fact that the company hasn't warned ahead of this report.

The average analysts' view is for a profit of 82 cents a share in the February-ended period, which is below the company's own expectation for earnings of 85 to 90 cents a share. A deep miss would likely wipe out what believers are left in the company, and bring white knight talk about a potential acquisition back to the fore.

Other companies slated to report before Thursday's opening bell include Bluefly ( BFLY), Bluegreen Corp. ( BXG), Bovie Medical ( BVX), Cache ( CACH), Deer Consumer Products ( DEER), Discovery Laboratories ( DSCO), JoS. A Bank Clothiers ( JOSB), Kid Brands ( KID), LJ International ( JADE), and Movado Group ( MOV).

The late roster features Cosi ( COSI), ParkerVision ( PRKR), Saba Software ( SABA), and TIBCO Software ( TIBX).

Thursday's economic calendar features the usual weekly initial and continuing jobless claims at 8:30 a.m. ET, and the third reading on fourth-quarter gross domestic product. Not much fireworks are expected as the consensus is calling for initial claims to come in at 350,000, slightly higher than last week's 348,000 total, and for the GDP estimate to hold steady at 3%.

And finally, Red Hat ( RHT) was the big mover in after-hours action, surging more than nearly 9% after the open source software company skipped past Wall Street's profit view in its latest quarter, and unveiled a $300 million buyback program.

The stock was last quoted at $55.80, up 8.6%, on volume of more than 700,000, according to Nasdaq.com. That puts the shares on pace to surpass the current 52-week high of $54.01 come Thursday.

-- Written by Michael Baron in New York.

>To contact the writer of this article, click here: Michael Baron.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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