Earnings news will drive Wall Street this week, but concerns about slowing profit growth and higher oil prices could keep a cap on any gains.
Quarterly results from widely watched companies such as Intel Corp and Johnson & Johnson will get the earnings season into full swing over the coming days.
A rash of economic data, including retail sales, the Producer Price Index and the Consumer Price Index, also will attract attention.
But worries that companies may signal slowing profit growth in the year's second half could cause the market to drift, analysts say.
"This is what's known as the summer doldrums," said Larry Wachtel, senior vice president and market analyst at Wachovia Securities.
"We're going to have to settle for the fact that this is a range-bound market, volume is low and there's not much courage out there in terms of buying power."
Paul Cherney, chief market analyst at Standard & Poor's, said, "The concern is that we have reached a slowing point for earnings growth.
"I expect the markets to stabilise and try to move higher, but I don't think there will be a herd stampede to the buy side."
For the week, stocks fell. The blue-chip Dow Jones industrial average ended on Friday at 10,213.22, down 0.68 percent for the week. The tech-laced Nasdaq Composite Index finished the week down 3.01 percent, at 1,946.33, while the broad S&P 500 index declined 1.12 percent during the week, closing Friday at 1,112.81.
Investors had been hoping that second-quarter earnings would live up to - or even beat - the first quarter's impressive growth.
But the season has been kicked off by a raft of disappointing statements, causing analysts to scale back estimates.
Tech firms such as PeopleSoft surprised on the downside, slashing its forecast, and its stock fell as much as 8 percent, dragging the Nasdaq down on Wednesday.
Internet media company Yahoo Inc, in results released after Wednesday's close, reported a quarterly profit that more than doubled, driven by higher ad revenue. But Yahoo's stock tumbled in after-hours trading after it gave a current-quarter forecast below Wall Street estimates.
Yet blue-chip conglomerate General Electric Co managed to bolster investor sentiment at the end of the week after Chief Executive Jeff Immelt called the US economy "the best we've seen in years." GE, whose stock is among the 30 in the Dow, reported second-quarter earnings rose slightly.
Among the technology-related firms, chipmaker Intel posts earnings on Tuesday, while its rival and Silicon Valley neighbour Advanced Micro Devices reports on Wednesday. Apple Computer Inc also reports on Wednesday.
Consumer-focused companies reporting results next week include health-care products group Johnson & Johnson on Tuesday and PepsiCo Inc on Thursday.
One of the most important economic figures of the week will be Wednesday's retail sales number for June. Economists polled by Reuters are forecasting a 0.6 percent decline in overall retail sales after a drop in motor vehicle sales during the month.
The US Producer Price Index for June, due on Thursday, will give a reading on inflation at the producer, or wholesale, level. The PPI tracks the prices of product components as goods move through the manufacturing and distribution process.
Comments
Comments are closed.