NEW YORK ( TheStreet) -- It looks like the punch bowl may not get a refill and Wall Street isn't quite sure what to think about it. The minutes from the latest meeting of the Federal Open Market Committee sent stocks spiraling lower for a little while there but when the closing bell sounded, the Dow Jones Industrial Average had clawed half the way back from its session low, and it was difficult to get a read on just how spooked the risk-on crowd really is. The yield on the 10-year Treasury jumped to 2.31%, of course, but the dip buyers who brought the major U.S. equity indices back to post fairly mild losses on the day shouldn't be ignored either. So maybe Ben Bernanke & Co. are leaving the door open for QE3 a bit more than traders first thought? Capital Economics, for one, doesn't think so. "
There will be no QE3 unless the recovery falters and, even under those circumstances, it is still questionable whether there would be a majority in favor of more action," wrote Paul Ashworth, the firm's chief U.S. economist, in an emailed statement on Tuesday. "The spike in Treasury yields in the immediate aftermath of the release of the minutes suggests that a few people were still clinging to the possibility that a QE3 was coming, perhaps led on by the dovish tone of chairman Ben Bernanke's recent speech on the labor market." Tuesday's finish suggests that it may not be such a big deal if the Fed doesn't come across with more stimulus, which does make some sense since the basis for that decision would be the improvement in the economy doesn't support more asset purchases. As for Wednesday's scheduled news, Bed Bath & Beyond ( BBBY) is reporting its fiscal fourth-quarter results after the closing bell, and the average estimate of analysts polled by Thomson Reuters is for a profit of $1.33 a share in the February-ended period on revenue of $2.66 billion. Shares of the Union, N.J.-based specialty retailer are up more than 13% so far in 2012, and nearly 40% in the past year as the company has beaten Wall Street's earnings expectations in eight straight quarters, delivering an average upside surprise of more than 12%. The stock closed Tuesday at $66.99, and hit a 52-week high of $68.20 on March 27.
At current levels, the valuation is a bit rich when compared with the competition. Bed Bath & Beyond shares trade at a forward price-to-earnings multiple of 15X vs. 12X for Target ( TGT), 11.5X for Wal-Mart ( WMT), and 13.9X for Williams-Sonoma ( WSM). The company forecast earnings of $1.28 to $1.33 a share for the quarter on Dec. 21 when it reported its third-quarter results, so it will have to be at the very top of that view just to meet the consensus view. The sell side is split with 15 of the 29 analysts covering Bed Bath & Beyond at strong buy (4) or buy (11), and rest divided between hold (13) and underperform (1). The median 12-month price target sits at $69. Morgan Stanley is the biggest bear, rating the stock at underweight (the equivalent of underperform), and it says the battle for consumer dollars in the domestic merchandise space is heating up. "
W remain cautious on near-term results, given slowed growth metrics in 3Q11, as well as increased competition from mass market and department stores, as noted by retailers like TGT and WSM," the firm said Friday in a preview of Bed Bath & Beyond's results. Check out TheStreet's quote page for Bed Bath & Beyond for year-to-date share performance, analyst ratings, earnings estimates and much more. Other companies reporting on Wednesday include Global Payments ( GPN), Monsanto ( MON), Pricesmart ( PSMT), and Ruby Tuesday ( RT). Wednesday's big piece of economic data is Automatic Data Processing's employment change report for March at 8:15 a.m. ET. Last month, ADP reported an increase in nonfarm private payrolls of 216,000 in February, and that was followed by the official government assessment that 233,000 such jobs were created. The current estimate for Friday's report from the Bureau of Labor Statistics is for private payrolls growth of 215,000 with the unemployment rate remaining pegged at 8.3%. There is no formal consensus view for the ADP report. Dennis Gartman, a markets commentator and independent investor, pays particularly close attention to the ADP report, which he believes has demonstrated a strong relationship with the government one. He thinks Wednesday's report could elicit a more dramatic reaction than usual because the markets will be closed on Friday when the government jobs report is issued.
"The latest 'guess-timates' have ADP's private jobs creation rising 200-215 thousand, and we shall not argue with that thesis," Gartman wrote in his daily newsletter, adding later: "How that shall translate into non-farm payrolls on Friday is another question entirely and it shall depend solely upon how active governments ... local, county, state and federal ... have been laying off workers while private companies have been reasonably active in adding them. If we are to have any differences with the consensus on the ADP figures it shall be that we might be surprised by a higher, rather than a lower, number than 225 thousand." The other datapoints on the docket are the Mortgage Bankers Association's weekly application activity index at 7 a.m. ET; the Institute for Supply Management's services index for March at 10 a.m. ET; and weekly crude inventories at 10:30 a.m. ET. Another question facing the market on Wednesday is whether there will be more talk of Apple ( AAPL) heading to $1,000. There's a two-day streak now in place after Piper Jaffray followed up the call from Topeka Capital on Monday. Piper analyst Gene Munster is regarded as one of the most influential sell-side voices on Apple, and the stock reacted Tuesday by galloping to another intraday all-time high of $632.31, a level that still offers upside of 44% to Munster's new $910 price target. But it was the mention of Apple hitting $1,000 in 2014, and becoming the first company with a $1 trillion market cap that got the most digital ink. Munster says Apple's earnings will support the advance as the company continues to grab market share and inspire intense loyalty among its customers. He said the firm's survey work has found 94% of existing iPhone owners expect their next phone will also be an iPhone. "Despite the law of large numbers, we believe the opportunity in mobile devices (iPhone and iPad) are big enough for Apple will grow earnings by 20%-plus over the next three years, while our price target is based on a 12x earnings multiple," he wrote. "The bottom line, while it seems virtually every investor (professional and retail) and analyst has something positive to say about Apple, the multiple on shares does not suggest there is excessive investor exuberance." Check out TheStreet's quote page for Apple for year-to-date share performance, analyst ratings, earnings estimates and much more.
And finally, SanDisk ( SNDK) was declining in Tuesday's after-hours session after the flash memory company lowered its revenue and gross margin outlook for the first quarter. The company, which cited weaker demand and pricing, now sees revenue of roughly $1.2 billion vs. a prior projection for a range of $1.30 billion to $1.35 billion. The current average estimate of analysts polled by Thomson Reuters is for revenue of $1.34 billion in the quarter. SanDisk didn't provide a specific guidance for gross margin other than to say it expects to come in below a previous forecast of 39-42%. Wall Street's consensus view sits at 41.8%. The stock was last quoted at $46.40, down 7.3%, on volume of more than 640,000, according to Nasdaq.com. -- Written by Michael Baron in New York. >To contact the writer of this article, click here: Michael Baron.