Updated from 6:39 p.m. ET to include additional information on Texas Instruments and NetApp. NEW YORK ( TheStreet) -- The ugly selling continues and it's hard to find a reason why the tide will turn anytime soon. The kneejerk reaction to President Barack Obama's re-election has seen plenty of follow-through with the Dow Jones Industrial Average now down in five of the past six sessions and the Nasdaq Composite qualifying for a correction by shedding 11% off its post-QE3 high for 2012. All the rhetoric is pointing to a very difficult debate on solving the fiscal cliff. The president is sticking to his guns on higher taxes for the richest of Americans, pressing the advantage he gained a little more than a week ago. The Republicans have shown some willingness to reach across the aisle but they also have to defend what turf they have left and can't afford to cave completely. Deutsche Bank offered this assessment as anxiety about Capitol Hill builds on Wall Street. The firm noted that Obama is now looking for $1.6 trillion in additional tax revenue over the next decade, double the $800 billion target that he couldn't get GOP leaders on board with in the summer of 2011. One week on from the U.S. Presidential election result, and we're no closer to a solution on the fiscal cliff with 48 days left in the year," Deutsche Bank observed on Wednesday, adding later: "The seemingly hardline approach sets the scene for tough negotiations with congressional leaders on Friday." And the question can quickly go from "why buy stocks here?" to "why not sell before all of 2012's gains disappear?" Longtime market watcher Ed Yardeni was trying to stay bullish about the end of the year ahead of Wednesday's regular session but noted the time crunch of the fiscal cliff isn't exactly conducive to a surge in stocks. "The year is almost over," he wrote in emailed commentarty. "There won't be a year-end rally until the fiscal cliff issue is resolved. If it isn't resolved before the end of the year, then there is likely to be more downside to the current correction until the issue is resolved early next year. I'm still expecting a happy ending for the year, but there isn't much time left." Sam Stovall, chief U.S. equity strategist at S&P Capital IQ, noted some of the selling is being driven by investors looking to get ahead of changes in tax implications for investments. "With uncertainty surrounding the conclusion of the fiscal cliff, be it a likely postponement, a preferred outright solution, or the unthinkable continuation of irreconcilable differences, investors are tripping over themselves in an attempt to lighten their positions in stocks with hefty dividend yields or price appreciation, as future tax rates won't likely be as favorable," he wrote. "Even though this swift exodus may soon be followed by a 'V' shaped recovery should a resolution be forthcoming, a lot of technical damage has already been done. We think this will need to be repaired before a sustainable advance is resumed."
As for Thursday's scheduled news, Target ( TGT) is slated to report its third-quarter results before the opening bell, and the average estimate of analysts polled by Thomson Reuters for a profit of 77 cents a share in the October-ended period on revenue of $16.92 billion. Shares of the Minneapolis-based retailer closed Wedneday at $61.38, up nearly 20% so far in 2012. JPMorgan sees more upside from here though. The firm upgraded Target to overweight on Monday and lifted its price target to $76 from $66. "
We believe the stock is positioned for outperformance in 2013 based on accelerating earnings growth over the next two years against reasonable valuation with specific catalysts," the firm said. "We cite the followingreasons: (1) easy Holiday comparisons with specific merchandising catalysts(Neiman, Nate, and Threshold); (2) accelerating sales, earnings, cash flow, andbuyback growth in 2013-2014 related to Canada/leverage; (3) a derivative housing play with nearly 20% of sales in this category; and (4) valuation levels that support reasonable downside protection." Overall, the sell side is mostly optimistic with 15 of the 23 analysts covering Target at either strong buy (5) or buy (10) with the 12-month median price target sitting at $71. Also reporting before the open is Target rival Wal-Mart Stores ( WMT), the world's largest retailer. Wall Street is expecting earnings of $1.07 a share on revenue of $115 billion from the Bentonville, Ark.-based behemoth, which has topped the consensus view in six of the past eight quarters. Meantime, Dell ( DELL) is the big name after Thursday's closing bell with analysts expecting a profit of 40 cents a share in the PC maker's third quarter on revenue of $13.89 billion. Sterne Agee previewed the numbers on Tuesday, and while it's not expecting a Cisco-like blowout performance, the firm sees some potential for a bounce in Dell's stock, which is down nearly 35% in 2012. "Our supply chain checks unsurprisingly indicate that its core PC business remains under pressure from a tough macro and cannibalization from iOS and Android," the firm said. "However, given low expectations, we expect results to be in-line or better. For its outlook, it is a similar story with low expectations. Because of this, we would not be surprised to see a near-term rally in DELL shares though our longer-term concerns remain." UBS weighed in as well, saying it expects the PC business to get worse before it gets better. The firm has a neutral rating on Dell with a $10 price target. "We expect Dell to face pressure from tablet cannibalization, a cautious Windows 8 transition, and softening IT budgets," UBS said, adding later: "Dell's expense ratio probably will deteriorate from last year given revenue weakness." Check out TheStreet's quote page for Dell for year-to-date share performance, analyst ratings, earnings estimates and much more.
Other companies slated to report before Thursday's open include Bon-Ton Stores ( BONT), Children's Place ( PLCE), Dollar Tree Stores ( DLTR), GameStop ( GME), Perry Ellis ( PERY), Ross Stores ( ROST), Stage Stores ( STGS), Stein Mart ( SMRT), The Buckle ( BKE), and Viacom ( VIAB). The late roster features Applied Materials ( AMAT), Aruba Networks ( ARUN), Autodesk ( ADSK), Cosi ( COSI), Dole Food ( DOLE), Gap ( GPS), Intuit ( INTU), Marvell Technology ( MRVL), New York & Co. ( NWY), Sears Holdings ( SHLD), Sina Corp. ( SINA), and The Wet Seal ( WTSLA). Thursday's economic calendar features weekly initial and continuing jobless claims at 8:30 a.m. ET; the consumer price index for October at 8:30 a.m. ET; and the Empire State manufacturing survey for November at 8:30 a.m. ET. And finally, there were plenty of headlines to parse after Wednesday's closing bell with a smattering of earnings reports competing with a barrage of Schedule 13F filings. One stock to watch on Thursday will be Yahoo! ( YHOO), which could see some buying interest following news that Greenlight Capital's David Einhorn has jumped back into the stock, snapping up roughly four million shares in the calendar third quarter. Shares of Petsmart ( PETM), meantime, were higher in late trades after the Phoenix-based pet products retailer reported above-consensus quarterly results. The company posted a profit of $82.3 million, or 75 cents a share, for its third quarter ended Sept. 30 on sales of $1.63 billion, ahead of the average estimate of analysts polled by Thomson Reuters for earnings of 63 cents a share on sales of $1.62 billion. The stock was last quoted at $68.50, up 5.6%, on volume of nearly 200,000, according to Nasdaq.com. Also advancing in the extended session was NetApp ( NTAP) after the Sunnyvale, Calif.-based maker of storage and data management software delivered a solid beat in its fiscal second quarter and gave a robust outlook as well. NetApp forecast non-GAAP earnings of 53 to 58 cents a share for its fiscal third quarter ending in January on revenue ranging from $1.575 billion to $1.675 billion. That view compares to Wall Street's current consensus estimate for earnings of 54 cents a share on revenue of $1.62 billion. Shares of NetApp were last quoted at $29.89, up 10.2%, on volume of 3.89 million, according to Nasdaq.com. For its part, Texas Instruments ( NTAP) edged up after the bell as the company announced fresh restructuring plans calling for the elimination of 1700 jobs, or roughly 5% of its workforce. The company anticipates charges totaling $325 million in connection with the restructuring program. It's targeting annual savings of $450 million from the moves. -- Written by Michael Baron in New York. >To contact the writer of this article, click here: Michael Baron.