Wall Street will count on quarterly results of companies ranging from General Electric Co to Intel Corp this week to help reinforce expectations for a recovery in the economy and corporate profits to propel stocks higher.
Investors betting that a sustainable recovery is in the cards have already driven the market sharply higher in recent sessions.
The Dow Jones industrial average and the Standard & Poor's 500 index closed at peaks unseen in at least 20 months on Thursday, when the technology-packed Nasdaq Composite Index ended at a fresh 2 1/2-year high.
While the market's steady trek higher over the past month has stirred up fears that stock prices may have climbed too far, too fast, many analysts are optimistic that a solid earnings season will help soothe those jitters.
"There is room for this market to go higher," said Rich Nash, chief market strategist at Victory Capital Management, adding that he expects fourth-quarter earnings to increase by 25 percent to 26 percent.
"We are expecting a pretty decent earnings season for corporate America, and next week will kick that off."
A barrage of economic data in the days ahead also will garner a bit of attention from Wall Street, as investors search for signs that the economic rebound is gathering steam.
A report on retail sales will help give clues to the health of consumer spending, which drives two-thirds of economic growth. Weekly jobless claims figures will be in focus, particularly after Friday's disappointing payrolls report.
In addition, the consumer and producer price indexes will offer the government's latest inflation estimates and possibly yield clues to how long the Federal Reserve may be willing to keep interest rates low.
All three major market gauges climbed this week, helping the Nasdaq Composite rack up a fifth straight week of gains, while pushing both the Dow and the S&P 500 to a seventh straight week of gains.
For the week, the Dow rose 0.5 percent, the Nasdaq Composite climbed 4 percent, and the S&P 500 rose 1.2 percent.
Along with results from semiconductor giant Intel, earnings reports are due from technology heavyweights Apple Computer Inc, Juniper Networks Inc, and Sun Microsystems Inc. Results also are on tap from Internet media company Yahoo Inc and health care company Abbott Laboratories.
Financial services companies were also likely to be in focus, with quarterly scorecards due from Bank of America Corp, Comerica Inc, FleetBoston Financial and Wachovia Corp, among others.
The optimism over earnings is likely to overshadow most everything else, including the unrelenting decline of the dollar, which hit a fresh record low against the euro on Friday.
While a softer dollar makes US exports more competitive overseas, it also bites into the value of dollar-denominated assets, prompting worries that foreign investors will return to their own markets.
In economic news, the government is scheduled to issue the Producer Price Index for December on Wednesday.
Economists in a Reuters poll forecast the overall PPI would rise 0.2 percent overall and, excluding volatile food and energy prices, the core PPI would edge up 0.1 percent.
The Consumer Price Index for December, due on Thursday, is expected to show a gain of 0.2 percent overall and, minus food and energy, an increase of 0.1 percent.