Corporate Earnings Season Launches
Earnings will dictate the course of stocks this week, as corporate America kicks off one of the busiest weeks in its quarterly reporting season.
“Expectations are high, so the earnings reports ... will have to be just as strong,” said John Caldwell, chief investment strategist at McDonald Financial Group in Cleveland. “They have to be strong to support the returns we had for stocks over the last year, and they have to be very strong to support stocks’ moving even higher.”
About 70 companies in the Standard & Poor’s 500 index are scheduled to report results this week. And though investors are anticipating a bumper crop of earnings, rising tensions in the Middle East could eclipse any upbeat news on the corporate front, analysts said.
Dow components due to post earnings this week are Intel Corp., Johnson & Johnson, IBM Corp. and Citigroup Inc.
Other heavyweights reporting results include Merrill Lynch & Co., Texas Instruments Inc. and PepsiCo Inc.
For the first quarter, analysts have pegged earnings growth over last year of 17%, according to market research firm Thomson First Call. Though that is slightly below the previous quarter’s sizzling 28% growth rate, it’s still relatively strong.
Though earnings will take center stage, investors will also receive a batch of economic data, offering more clues about the strength and staying power of the economic recovery.
Today, the Federal Reserve Bank of Chicago will release its Midwest manufacturing index for February. On Tuesday, the government will issue reports on March retail sales and February business inventories.
Later in the week, investors will also look out for figures on weekly jobless claims, housing starts and March industrial production, and the University of Michigan’s consumer sentiment index. Analysts have pegged an increase in the closely watched consumer sentiment gauge to 96.5 for April -- up from a final March reading of 95.8.
