Updated from 5:38 p.m. ET to include an updated share price for Cisco's stock in after-hours action and analyst commentary on the Fed minutes.

NEW YORK ( TheStreet) -- The bulls have been in control for the majority of 2012 but it's getting increasingly difficult to stay optimistic these days.

Especially after an ugly finish like the one witnessed on Wall Street Tuesday.

And right on time, the latest fund manager survey conducted by Bank of America/Merrill Lynch was a bit of mixed bag itself. The growth outlook jumped (a good thing) but there was also a warning signal to deal with as stocks tend to underperform bonds whenever the smart money embraces equities.

"While the fiscal cliff is viewed as by far the biggest tail risk, investor sentiment had clearly become more optimistic on growth & risk in recent weeks," B of A said of the poll's findings. "In the November FMS fund manager survey global growth expectations rose to 18-month high, China growthoptimism exploded to 3-year highs and hedge fund net exposure to stocks rose to its highest (40%) since Jun'07."

The survey involved 248 participants with roughly $695 billion worth of assets under management with responses logged between Nov. 2-8. B of A noted the majority of respondents proffered their answers before the Nov. 6 presidential election.

While noting that cash holdings still remain at around average levels, B of A said it believes "some market caution is in order" precisely because the hedgies have augmented the stock component of their portfolios.

"Since 2007, whenever HF hedge fund exposure has exceeded 35%, SPX the S&P 500 has underperformed Treasuries by 700 basis points in the following month," B of A said.

As for Wednesday's scheduled news, Staples ( SPLS) is reporting its third-quarter results before the opening bell, and the average estimate of analysts polled by Thomson Reuters is for a profit of 45 cents a share in the October-ended period on revenue of $6.45 billion.

Shares of the Framingham, Mass.-based office products retailer are down roughly 11% so far this year. The stock closed Tuesday at $11.25, down 33.5% since hitting a 52-week high of $16.93 on March 20.

The sell side is bearish ahead of the print with 14 of the 20 analysts covering Staples at hold (11), underperform (2), or sell (1) with the 12-month median price target sitting at $12.

UBS is in the neutral camp and it cut its price target to $11 from $12 on Tuesday. The firm anticipates the retailer will feel some pinch from weak PC sales but found something of a silver lining in this trend.

"The recent lessons from SPLS' peers shows that the tech category has been particularly soft as of late (PCs = 6% of SPLS sales)," UBS said. "This puts the bias to the downside for our -1% comp est for 3Q. The perverse benefit of not having these sales is that it's a gross margin good guy. This was the case with OMX OfficeMax & ODP Office Depot. SPLS GM gross margin compare is more difficult than last quarter, but we don't expect to see as much compression as the 51 bps basis points from 2Q. We est. a 25 bps decline."

Aside from the actual results though, UBS will be looking for color on what kind of benefit Staples is seeing from its restructuring efforts.

"This will be the first opportunity to get a more detailed debriefing of SPLS recently announced strategies to improve its business," the firm said. "The co. has a plan to achieve $250 mm in pre-tax cost savings by end of '15. The market has been anxiously awaiting to hear how these savings will be achieved, but also how much will be shared with equity holders. If the full amount dropped to the bottom-line, it would translate to $0.25 of EPS accretion (providing ~20% accretion)."

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

Williams-Sonoma ( WSM) is also releasing its numbers on Wednesday with Wall Street calling for a profit of 45 cents a share on revenue of $921.8 million in the third quarter.

UBS said it's expecting a "solid" performance from the company with the potential for upside to the 45-cent a share estimate, which is based on a forecast for 2% growth in same-store sales. The firm, however, kept a neutral rating on the stock and cut its price target to $43 from $47, saying it thinks a strong performance is already baked into the stock price.

" With the shares up 20%+ since reporting in late August and its P/E and EBITDA multiples now trading at a premium to 2-year averages, we think some of this outperformance is priced in," UBS said. "The company has the momentum at its side, but would we be more judicious with timing a buying opportunity."

Arguing that the shares have priced in "a beat and a raise," UBS said Williams-Sonoma has to, at the very least, add any upside in the third quarter to its full-year forecast.

"The outlook for the holidays will gain more credibility if WSM was able to generate a nice WS brand comp in 3Q (we are modeling a 1% increase)," the firm added. The shares closed Tuesday at $46.05, up nearly 20% so far in 2012.

Also slated to report on Wednessday are Abercrombie & Fitch ( ANF), AGCO Corp. ( AG), Bluegreen Corp. ( BXG), DryShips ( DRYS), FriendFinder Networks ( FFN), Hot Topic ( HOTT), Limited Brands ( LTD), Millipore ( MIL), NetApp ( NTAP), New Frontier Media ( NOOF), Petsmart ( PETM), Retalix ( RTLX), Spectrum Brands ( SPB), Tyco International ( TYC), and

Wednesday's economic calendar is pretty packed with the Mortgage Bankers Association's weekly mortgage application activity index at 7 a.m. ET; retail sales for October at 8:30 a.m. ET; the producer price index for October at 8:30 a.m. ET; business inventories for September at 10 a.m. ET; and the release of the minutes of the Oct. 23-24 policy meeting of the Federal Open Market Committee at 2 p.m. ET.

Jim O'Sullivan, chief U.S. economist at High Frequency Economics, expects the impact of Hurricane Sandy to start to show up in the data this week, specifically in tomorrow's retail sales number as well as initial jobless claims on Thursday.

"While we expect the net impact on Q4 GDP to be modest, some of the monthly and weekly data could be affected significantly, with extra weakness at the start of the quarter followed by catch-up later," he said. "The main candidates for a noticeable impact this week are retail sales and jobless claims -- with retail sales down and jobless claims up."

And finally, Cisco ( CSCO) shares were surging in late trades after the Dow component topped Wall Street's expectations for its latest quarter on both the top and bottom lines.

The networking giant reported non-GAAP earnings of $2.57 billion, or 48 cents a share, on revenue of $11.88 billion, up from a year-ago equivalent profit of $2.32 billion, or 43 cents a share, on revenue of $11.27 billion.

The performance topped the average estimate of analysts polled by Thomson Reuters for earnings of 46 cents per share on revenue of $11.77 billion. On CNBC, CEO John Chambers said the company's gross margin came in at 62.7% for the quarter. The stock was last quoted at $18.10, up 7.42%, on extended volume of 12.24 million, according to Nasdaq.com.

-- 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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