Edgy Financial Markets Ready for Pivotal Week

After struggling through one of the most volatile weeks in recent memory, U.S. financial markets should calm early this week before tackling another round of data and an advance batch of first-quarter earnings reports.

Last week, the Dow industrials shed more than 214 points--the fourth-largest weekly point loss total in New York Stock Exchange history--while bond yields edged up to their highest level in seven months.

The Dow Jones industrial average closed Friday at 6526.07 points, up 48.72. The record loss is still the 295.98-point fall for the week ended Oct. 23, 1987, the week of the Black Monday crash when the Dow had a one-day drop of 508 points.

Less than a month ago, the Dow was tearing into record ground, leaping to 7,085.16 points on a perfect investment climate.

The dollar, with one eye on U.S. asset markets, also had a roller-coaster week, slipping to a seven-week low against the German mark early, before ending on a positive note in tandem with stocks on Friday.

This week, first-quarter earnings will begin to exert their hold over Wall Street, beginning with Motorola Inc.’s report after today’s stock market close.

On-target or better-than-forecast earnings from Motorola could give a further boost to the high-technology sector, which rebounded late last week from a sharp sell-off.

But analysts say the real test will come with International Business Machines Corp., Intel Corp. and Microsoft Corp. earnings, due out later in the period.