Earnings, Data Deluge Ahead on Wall Street

After a rollercoaster ride through the past week, investors will have to navigate a torrent of company results and economic indicators next week for any signs of a clear direction for U.S. stocks.

Major companies reporting next week include Kimberly-Clark Corp. (KL) Monday, American Express Co. (AXP) and Lockheed Martin Corp. (LMT) Tuesday, Boeing Co. (BA) and Colgate-Palmolive Co. (CP) Wednesday, and Microsoft Corp. (MSFT) and Exxon Mobil Corp. (XOM) Thursday.

Next week's economic data includes the advanced reading of first-quarter U.S. gross domestic product Thursday.

Investors will scrutinize the GDP data to get a sense of whether more aggressive rate increases may be in the offing next month or later this year. The Federal Open Market Committee (search), the Federal Reserve's policy-making panel, meets on May 3.

Just as stronger company earnings news and positive economic data pulled the stock market back from the brink Thursday — only to fall again Friday — any negative news in next week's corporate results and economic indicators could spook jittery investors.

"The mood changed because earnings were OK, so with another flood of earnings next week, we need to confirm what people saw in the last couple of days," Peter Boockvar, equity strategist at Miller Tabak & Co., said Friday.

"If earnings turn out to be very mixed, then that mood can change very easily. Thursday could very well have been a one-day wonder. If we can gain more feel on the economy based on earnings or economic data next week, that will be the driver."

In the past week's wild ride, the blue-chip Dow Jones average (search) and the broader Standard & Poor's 500 (search) plunged to fresh 2005 lows Wednesday, as a jump in consumer prices fanned fears of inflation.

Thursday, stocks dramatically reversed course, with both the Dow and the S&P 500 having their biggest one-day percentage gains since October 2003 on positive earnings and economic news.

Friday, stocks fell again, hit by higher crude oil prices, a report that North Korea could be preparing for a nuclear weapons test and some disappointing earnings from companies such as Costco Wholesale Corp.

For the week, the Dow ended up 0.70 percent, the S&P 500 edged up 0.83 percent and tech-heavy Nasdaq rose 1.26 percent.

Other economic indicators next week include April consumer confidence data Tuesday and March durable goods figures Wednesday.

Friday's slew of data includes the University of Michigan's (search) final April consumer sentiment report, the April report from the National Association of Purchasing Management in New York, and the Chicago purchasing managers index for April.

Oil prices, now back over $55 a barrel, will be in focus as President Bush meets Saudi Arabia's Crown Prince Abdullah Monday. Bush has said he is seeking a clear answer from the Saudi government about the size of its spare oil production capacity.

U.S. crude for June delivery ended Friday at $55.39 a barrel on the New York Mercantile Exchange, gaining $1.19, amid concern that several refinery outages could strain gasoline supply before the peak summer demand hits home.

As usual though, it is the Federal Reserve and interest rates that will be uppermost in investors' minds.

"I think as you get closer to the FOMC (on May 3), you are probably going to get a pullback and re-test the lows of this week," said Jeffrey Saut, chief investment strategist at Raymond James Financial, in an interview Friday.

"If that re-test is successful, then you might have something on the upside," Saut said. "If it is not successful, this thing could turn pretty ugly."