NEW YORK – U.S. stock investors face a mind-numbing pile of information next week as corporate earnings and economic data pour in, Alan Greenspan (search) speaks and the presidential election heads toward the homestretch.
Crude oil prices will, of course, remain near the top of investors' watch lists after hitting a record $55 a barrel Friday.
"Unless oil drops dramatically, earnings are probably more of a key driver of the market next week," said John Caldwell, chief investment strategist at McDonald Financial Group. "The market has been dealing with the steady drumbeat of higher energy prices and the big swing would happen, I think, if prices fell unexpectedly."
A slew of companies are scheduled to report quarterly earnings, including nearly half of the 30 firms whose stocks make up the Dow Jones industrial average.
Corporate heavyweights including 3M Co. (MMM), Microsoft Corp. (MSFT), International Business Machines Corp. (IBM), Caterpillar Inc. (CAT), Amazon.com Inc. (AMZN) and United Technologies Corp. (UTX) are all scheduled to report. Results will be scrutinized for clues on the health of both the economy and various sectors.
"Although we don't own them, I'll be looking at IBM because they are a bellwether," said Ray Rund, managing director at Shaker Investments. "If they're doing well, it bodes well for the tech sector. If they're not doing well, it probably indicates a soft patch in IT (information technology) spending."
This week, 40 companies in the Standard & Poor's 500 index (search) reported earnings. Of that group, 24 topped Wall Street estimates, eight were in line with estimates and eight missed.
Crude oil for November delivery settled on Friday at $54.93 a barrel, up 17 cents for the day, after hitting a fresh record at $55 a barrel — the highest price since oil futures began trading on the New York Mercantile Exchange (search) in 1983.
Swings in crude prices will be closely tracked next week, as concerns mount that high energy prices will take their toll on the economy.
"I think the market will be sensitive to a number of things," said Robert Robbins, president of Robbins Capital Management. "Improvement in major corporate earnings, improvement in President Bush's chance of re-election and, obviously, crude oil prices. The market is extremely sensitive to that."
For the week, stocks fell. The blue-chip Dow Jones industrial average (search) dropped 1.21 percent, while the broader Standard & Poor's 500 index declined 1.24 percent, and the tech-laced Nasdaq Composite Index dipped 0.44 percent.
Key economic data slated for next week includes housing starts and the U.S. Consumer Price Index (search) for September, which will provide a read on inflation. Both reports are expected Tuesday.
The Philadelphia Federal Reserve Bank's October survey will be released Thursday, providing a gauge for manufacturing activity in the Northeast.
"We are going to have some good data on Tuesday and the critical element will be in the CPI. It's where people are going to look for some spillover of the oil issue and other core components," said Ned Riley, chief investment strategist at State Street Global Advisors in Boston.
Extra attention will be paid to the U.S. presidential election as the campaign heats up in the remaining two weeks before polls open on Nov. 2. Generally, Wall Street favors President George Bush for re-election, and stocks have tracked his gains in opinion polls.
But as the end draws near, the race has tightened, leaving the outcome less clear.
"I'm not convinced that a Bush win would be overall good for the country in the longer term, although a lot of people on Wall Street tend to favor a Republican administration," Shaker Investments' Rund said.
"When we had job growth and a balanced budget, things seemed to go well on Wall Street, and the last time we had that was in the Clinton administration," he said.
Wall Street will also listen closely to remarks from Greenspan, who is scheduled to speak on the mortgage market and consumer debt before a group of bankers on Tuesday.