NEW YORK ( TheStreet) -- Where you think the U.S. stock market ends up this year likely depends on your view of the current action.

Or more precisely, the determining factor could be viewed as which of these 'R' words you think is most accurate in describing the near-constant selloff in equities since the calendar flipped over to May: Retrace or retreat.

John Stoltzfus, Oppenheimer's new chief market strategist, is in the retrace camp.

"The current pullback in stocks continues to appear to us as an orderly pullback or more accurately a 'giveback' after stocks had a sizable run-up from last October through early April this year that found stocks looking like they'd gotten ahead of themselves and the economy," he wrote earlier this week. "For now we look for market choppiness to persist as investors with positions holding outsized gains from the run-up take some profits and rebalance portfolio positions for new opportunities.

He continued: "The ongoing period of retracement will likely end when the pace of economic growth and earnings reasserts itself, which we believe will occur in the second half of the year."

That view seems, well, a bit too orderly, given the messy drama playing out in Greece and the rest of the eurozone, but there's no denying that at least some of the selling is related to profit-taking spurred on by the negative turn in the headlines from across the pond.

But beyond the eurozone's woes, those in the retreat camp can also point to the softening in U.S. economic data of late, the upcoming end of Operation Twist in June (with no sign of QE3 in sight unless the recovery really starts to flag, which can't exactly be called a positive for stocks even if it does bring about a refill of the punch bowl), and the so-called fiscal cliff looming at the end of this year unless Congress can find a way to cooperate during a presidential election year.

Oh, and earnings estimates continue to decline with analysts now projecting year-over-year profit growth of 7.8% for the second quarter, down from an estimate of 9.2% as of April 1.

Judging by the minutes of the Federal Open Market Committee's last policy meeting in late April, there's definitely some central bankers who are worried. The minutes, released Wednesday afternoon, warned of the potential for a "sharp" fiscal tightening at the start of 2013 if a budget plan isn't hammered out, saying this possibility poses a "sizable risk."

Oppenheimer's Stoltzfus has a year-end price target of 1450 for the S&P 500, a level that represents upside of more than 9% from Wednesday's close at 1325.

The main argument of the retrace crowd is that the U.S. will be fine with the economy and earnings on an upward trajectory and that should trump whatever gyrations Europe experiences.

S&P Capital IQ has a year-end target of 1450 for the S&P 500 as well but the firm voiced some wariness Wednesday about the reaction of Greece's quarreling politicians to news that the country's residents have withdrawn more than ¿700M from banks in the past week and a half.

"Logic would therefore dictate that Greek politicians need to become more centrist in their thinking before the situation deteriorates further," wrote Sam Stovall, S&P's chief equity strategist. "Yet the inability of equities to mount more than an intraday counter-trend rally, combined with the ongoing decline of oil prices, the seemingly endless surge in Treasuries, and the continual collapse in gold as investors seek the liquidity of cash, speak, we think, to the massive risk should the contagion spread. While history says a bottom may be near, polls indicate that it may be too risky to assume that cooler minds will prevail."

As for Thursday's scheduled news, the big reporting week for retailers continues with the biggest retailer of them all, Wal-Mart Stores ( WMT). The Bentonville, Ark.-based behemoth is slated to report its first-quarter results before the opening bell, and the average estimate of analysts polled by Thomson Reuters is for a profit of $1.04 a share in the April-ended period on sales of $110.54 billion.

After a strong 2011 when the stock appreciated 11%, Wal-Mart shares have stalled, losing less than 1% year-to-date. The company has come in a penny light on earnings in the past two quarters, although it's got U.S. same-store sales back in positive territory.

Back on Feb. 21, when Wal-Mart reported its fourth-quarter and full-year results, it forecast earnings of $1.01 to $1.06 a share for the first quarter and gave a full-year guidance for a profit from continuing operations of $4.72 to $4.92 a share. The company also boosted its annual dividend by 9% on March 1 to $1.59 a share, pushing the forward annual yield to 2.7% at current levels; not bad with the 10-year Treasury bond's yield sitting below 1.8%.

The sell side is mostly on the bearish side of the ledger with 18 of the 28 analysts covering the stock at either hold (17) or underperform (1). The median 12-month price target sits at $64. Wal-Mart shares began the year strong, running to a 52-week high of $62.63 on Feb. 1, but the stock is down 5.5% from that peak based on Wednesday's closing price of $59.19.

S&P Capital IQ reiterated a buy recommendation on the stock on April 27 though, when the stock was trading below $59 in the wake of reports that company executives had engaged in bribery as part of Wal-Mart's expansion efforts in Mexico, news that took the shares down as low as $57.18 on April 25.

"We believe that the market has over-estimated the long-term economic impact on WMT from fines, legal costs and slower growth, as a result of alleged violations of the Foreign Corrupt Practices Act," wrote analyst Ian Gordon, who has a $67 price target on Wal-Mart, at that time. "While near-term sentiment is likely to remain negative, we expect headline risk to dissipate over time, and we see meaningful upside in the shares. On expectations of a strong Q1, we raise our FY '13 EPS forecast to $4.89 from $4.82 and set FY'14's at $5.37."

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

Thursday's other big earnings reports include Sears Holdings ( SHLD), Gap ( GPS), and ( CRM)

Also on the morning docket are Bon-Ton Stores ( BONT), Cato Corp. ( CATO), Children's Place ( PLCE), Computer Sciences ( CSC), Dollar Tree Stores ( DLTR), GameStop ( GME), Gold Fields ( GFI), Perry Ellis International ( PERY), Red Robin Gourmet Burgers ( RRGB), Ross Stores ( ROST), Stage Stores ( SSI), Stein Mart ( SMRT), The Buckle ( BKE), and Too Inc. ( TOO).

The late roster features Aeropostale ( ARO), Applied Materials ( AMAT), Aruba Networks ( ARUN), Autodesk ( ADSK), Brocade Communications ( BRCD), Cosi ( COSI), GigaMedia ( GIGM), Intuit ( INTU), Marvell Technology ( MRVL), New York & Co. ( NWY), Pacific Sunwear of California ( PSUN), Shoe Carnival ( SCVL), Youku ( YOKU), and Zumiez ( ZUMZ).

Thursday's economic calendar brings weekly initial and jobless claims at 8:30 a.m. ET as well as the Philadelphia Federal Reserve's read on regional manufacturing activity for May and leading indicators for April at 10 a.m. ET.

The consensus is for initial claims to tick down to 365,000, according to, whose surveys also forecast a tick up in the Philly Fed survey to 8.8 and a 0.2% increase in leading indicators.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, is looking for initial claims of about 370,000 as he's expecting some flatness over the next weeks, saying the plunge seen in the September-to-February timeframe "was too fast to be sustained."

Shepherdson thinks the Philly Fed has the best chance to surprise to the upside after the strong Empire State survey earlier this week. He's looking for a reading of 10. As for Europe's problems, the economist took heart in the positive data on the housing market the past few days and is sticking to his view that the recovery in the U.S. economy remains very insulated from old continent's chaos.

"Remember, 87% of U.S. economic activity is domestic, and of the 13% of gross income derived from foreign trade, 83% is earned by selling goods and services to non-Europeans," he wrote in commentary late Wednesday. "The weakness of the Euro Zone is undoubtedly making itself felt to those businesses which do earn their living from exports to the region, and we fully expect their sales to deteriorate a good deal further, but these firms do not drive the U.S. economy."

And finally, Herbalife ( HLF) was a winner in late trades after famed short seller David Einhorn of Greenlight Capital didn't mention the company in an investor presentation.

Einhorn caused a stir earlier this month by quizzing up Herbalife's executives during their quarterly conference call. The stock fell sharply after the May 1 conference call, dropping nearly 20% the next day. As of Tuesday's close at $42.44, the shares were down 40% from their May 1 close at $70.32.

On Wednesday, though, Herbalife shares jumped almost 17% to $49.51 as Einhorn didn't bring the company up, and the rally continued in the extended session with the stock tacking on another 2.7% to $50.83 on volume of more than 1.8 million.

-- 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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