Wall Street's fixation on economic data turns into a craving for profit news and forecasts this week as a slew of corporate earnings reports arrive.
Investors will receive their first big batch of reports from the final quarter of 2006 and try to determine whether robust profits that have spurred stocks to new heights will continue.
Although market forecasters expect profit growth to slow in 2007 amid what is seen as a decelerating economy, investors are nonetheless anxious to gain a better sense of how companies fared in the fourth quarter. The quarter and overall year saw enormous gains in stock prices, justified in part by double-digit earnings growth.
Gains continued last week, with the Dow Jones industrial average rising 1.3% to a record close Friday. The Standard & Poor's 500 index advanced 1.5% and the technology-laden Nasdaq composite rose 2.8%.
Though earnings season had its unofficial start last week with Alcoa's better-than-expected results, the real action begins Tuesday, when the week shortened by the Martin Luther King Jr. holiday starts and investors hear from Intel.
Although investors will keep tabs on earnings, economic readings will still hold great sway over the mood on Wall Street. The week brings much data, including figures on inflation and regional manufacturing.
Wall Street has reacted to recent economic reports with a mix of concern, enthusiasm and indifference as it struggled to determine whether the economy was slowing adequately or headed toward recession. It is hoped a gradual slowdown would protect corporate profits and allow the Federal Reserve to lower short-term interest rates.
The week ahead
* Martin Luther King Day; markets closed.
* New York Fed releases its Empire State manufacturing survey for January.
* Intel reports fourth-quarter earnings.
* The Fed releases its "beige book" report on regional economic activity. The Fed also is expected to release its report on industrial production and capacity utilization for December.
* Labor Department releases December's producer price index, a measure of inflation at the wholesale level.
* American Airlines parent AMR reports fourth-quarter earnings. Apple reports fiscal first-quarter results.
* Fed Chairman Ben S. Bernanke testifies before the Senate Budget Committee on long-term fiscal challenges.
* Labor Department releases the consumer price index.
* Commerce Department weighs in with figures on December housing starts and permits.
* Philadelphia Fed reports on regional manufacturing.
* Continental Airlines and Merrill Lynch report fourth-quarter results.
* University of Michigan releases its consumer sentiment reading for January.
* Citigroup reports fourth-quarter earnings.