Investors gear up for 'heart of earnings season'

stock marketClick chart for more market data. By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney) -- The first wave of quarterly financial results has come and gone, and investors have liked what they've seen. As a bigger batch of companies open their books next week, corporate earnings will continue to remain in focus.

The week ahead includes reports from nine Dow components, including Exxon Mobil (XOM, Fortune 500), 3M (MMM, Fortune 500), Procter & Gamble (PG, Fortune 500) and Microsoft (MSFT, Fortune 500), and 180 members of the S&P 500, such as Coach (COH), Netflix (NFLX), and Starbucks (SBUX, Fortune 500).

"Corporate results are driving the market right now," said Timothy Ghriskey, chief investment officer at Solaris Asset Management. "Now we're getting into the heart of earnings season, so they'll remain at the forefront of investors' minds."

Of the 137 S&P 500 companies that have already posted results, about 75% have beat earnings and sales estimates, according to Thomson Reuters. Profits have climbed by more than 18%, while revenues have increased 2% from a year ago.

Last week's better than-expected results left investors more confident and spurred an advance in the stock market. The Dow's (INDU) 1% uptick helped the blue-chip index end the week at a nearly 3-year high. The S&P 500 (SPX) also rose 1%, while the Nasdaq (COMP) finished up 2%.

"We've had several days of strong earnings, strong revenues, and results above expectations," Ghriskey said. "Overall, we should see more of the same."

On the economic front, investors will be looking for updates on the housing market, consumer sentiment and spending, and an initial reading on first-quarter economic growth.

They will also tune in for Federal Reserve Chairman Ben Bernanke's inaugural press conference Wednesday afternoon, after the central bank's two-day meeting on the nation's economic outlook and monetary policy ends.

On the docket

Monday: The new home sales index for March from the Census Bureau is due at 10 a.m. ET. The index is expected to have risen to a seasonally adjusted annual rate of 280,000 units, up from 250,000 the previous month.

After the closing bell, Netflix will announce first-quarter financial results. Analysts polled by Thomson Reuters expect the online movie rental company's profit to surge almost 80%, as sales climb 43% from a year earlier.

Tuesday: Before the opening bell, 3M (MMM, Fortune 500), Coca-Cola (KO, Fortune 500), Coach, Delta (DAL, Fortune 500), Ford (F, Fortune 500), and UPS (UPS, Fortune 500) will post financial results, among others.

The Case-Shiller 20-city home price index is expected to have decreased 3.2% in February after dipping 3.1% in January.

After the start of trading, the Conference Board releases its Consumer Confidence index for April. Economists forecast it to have edged up to 64.4, from 63.4 in March.

Seattle-based Amazon.com (AMZN, Fortune 500) is on tap to announce quarterly earnings Tuesday afternoon.

Wednesday: The earnings onslaught continues, with Boeing (BA, Fortune 500) and BP (BP) expected to announce results.

In the afternoon, investors will briefly turn their attention to the economy, as tight-lipped Bernanke holds his first of what will become four regular press conferences a year. The speech and question-and-answer session will follow the Fed's two-day meeting on monetary policy.

Reports on durable orders are also out on Wednesday.

After the bell, earnings from Aflac (AFL, Fortune 500), Baidu (BIDU), and Starbucks will take the stage.

Thursday: Before the start of trading, Exxon Mobil (XOM, Fortune 500) is expected to deliver a $10 billion profit, up 60% from a year ago, on revenue of $115 million.

PepsiCo (PEP, Fortune 500), Procter & Gamble and Sprint Nextel (S, Fortune 500) will reveal their quarterly earnings in the morning too.

Also on tap: The Department of Commerce will release its initial reading on economic growth during the first three months of the year. Economists expect the economy expanded at a rate of 1.7% during the first quarter.

Weekly initial claims data is due as well. Claims are expected to fall back to 390,000 in the latest week, after hovering above the key 400,000 level for two consecutive weeks.

Later in the morning, a report from the National Association of Realtors is expected to show a 1.5% rise in pending home sales for the month of March.

After the closing bell, analysts expect Microsoft will post a quarterly profit of $4.8 billion, up 20% from a year ago, on sales of $16.2 billion.

Friday: Dow components Caterpillar (CAT, Fortune 500), Chevron (CVX, Fortune 500) and Merck (MRK, Fortune 500) are all on tap to delivery quarterly results prior to Friday's opening bell.

Investors will also digest data on personal income and spending before the start of trading.

Shortly after the bell, investors will get the April reading of Chicago PMI, a regional manufacturing index, and the final April reading on consumer sentiment from the University of Michigan. To top of page

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