It looks as tho wahz was right on what the market will do........
I hold GOOG, JNJ, INTC.....& a few others,
Fletch
SAN FRANCISCO (MarketWatch) -- U.S. stocks will rise next week as Wall Street bets that corporate bellwethers including Citigroup, International Business Machines and Google Inc. will post stronger-than-expected financial results, strategists said.
However, gains will be moderate due to a flood of economic reports, particularly from the housing sector, which are expected to show more softening in the economy, they said.
"The market has set itself up for an upside surprise because of these tempered expectations on both the economy and corporate earnings," said Jay Suskind, director of trading at Ryan, Beck & Co., who expects stocks to gain ground next week.
Wednesday will be the key day for economic reports, highlighted by figures on consumer-level inflation as well as numbers on monthly housing starts and building permits.
Next week will be the first heavy week of first-quarter earnings reports and investors are watching to see if companies rise above the current expectations for much weaker earnings growth. The estimated first-quarter earnings growth rate, as tracked by Thomson Financial, currently stands at 3.4% down from 8.7% at the start of the year. That rate of growth would break a streak of 14 straight quarters of average earnings growth of at least 10%.
The focus of the earnings news will be the ten companies in the Dow Jones Industrial Average that are scheduled to report earnings next week. They include Johnson & Johnson (JNJ
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) , Intel Corp. (INTC
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) and Caterpillar Inc. (CAT
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) . Investors will also get a chance to evaluate Merrill Lynch's exposure to the subprime market when the country's biggest broker releases its quarterly results on Thursday. See Merrill outlook.
"Guidance is going to be cautious," said Philip Dow, director of equity strategy at RBC Dain Rauscher, about companies overall. "Having said that, the numbers probably will be better than expected. We're going to be in a tentative market where if you do have upside, it's going to be by inches."
Looking ahead to the second quarter, the growth rate is currently estimated at 3.4%, down from 3.9% at the start of the quarter and from 6.8% on Jan. 1.
Earnings
The technology group is currently expected by analysts to turn in the biggest year-over-year profit gain of the 10 sectors tracked by Thomson Financial, with a 9% increase in profit.
Next week, many of the biggest names in the field will post their results. Analysts surveyed by Thomson Financial expect IBM (IBM
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) to report a 12% increase in earnings to $1.21 a share, on a 6% revenue rise to $21.9 billion. IBM's report is due Tuesday. See IBM earnings preview.
Internet search-services provider Google Inc. (GOOG
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) is expected on Thursday to report a 44% jump in first-quarter profit to $3.30 a share, on a 63% rise in revenue to $2.49 billion.
Its rival, Yahoo Inc. (YHOO
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) , will post results on Tuesday. Analysts are looking for a profit of 11 cents a share on revenue of $1.2 billion.
Meanwhile, analysts forecast earnings at homebuilder D.R. Horton Inc. (DHI
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) to come in at 27 cents a share on a 21% sales decrease to $2.79 billion.
Economic updates
The consumer price index for March will come out a week after the minutes from the Federal Reserve's last rate-policy meeting underscored the central bank's focus on taming inflationary pressures.
Stocks fell Wednesday following the release of the minutes, as they dashed hopes by many market players that the Fed will soon cut the benchmark interest rate from 5.25%.
Economists polled by MarketWatch expect the core CPI, which strips out energy and food prices, to rise to 0.3% from 0.2% in February. The headline CPI is expected to come in at 0.7%, a rise of 3 percentage points from February.
"The Fed has been looking at core CPI, and core [personal consumption expenditure] to come down within the 1%-2% range, and the core CPI hasn't been really cooperating," said Brian Gendreau, investment strategist at ING Investment Management. "We will be looking for those numbers to come down, and that will signal that the economy is on track."
March retail sales, due Monday, are expected to rise to 0.4% from 0.1% in February. Excluding automobile sales, the forecast is for a rise of 0.8%. Sales lost 0.1% in February.
"We're really counting on the consumer to keep spending, because capitals expenditures have been disappointingly low," said Gendered.
He said that stronger same-store sales in March, as reported by retailers this past week, bode well for the new set of retail numbers.
The homebuilders' index, which measures the sentiment of contractors, is expected to fall to 34 from 36 on Monday.
On Wednesday, the monthly report on housing starts is due. The number of groundbreaking on new homes is expected to fall to 1.5 million from a seasonally adjusted annual rate of 1.53 million in February.
Meanwhile, economists expect 1.48 million building permits to have been issued in March, down from 1.53 in February.
The week will be capped off Friday by the Philadelphia Federal Reserve Bank's business survey for April and the Conference Board's report on leading economic indicators. End of Story
Carla Mozee is a reporter for MarketWatch in San Francisco.
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