By Kate Gibson
U.S. stocks are likely to continue their choppy ride in the days
ahead, as investors maintain fixation on events overseas and
fluctuations in the currency markets amid the usual U.S. earnings
reports and economic data.
"We're dealing with the Rodney Dangerfield bull market, it
doesn't get any respect, since everybody is sidetracked looking at
currencies while ignoring the fundamentals, which keep quietly
improving," said Fred Dickson, chief market strategist at Davidson
Companies.
The markets have been embroiled in events in Europe and China,
with the latter roiling stocks on Friday by unexpectedly raising
bank reserve requirements in an effort to keep its economy from
overheating.
The second such move in a month by Beijing came just ahead of
China's weekend Lunar New Year holiday. .
In Europe, leaders vowed to aid Greece as it contends with the
biggest budget shortfall in the European Union, with attention
turning to a gathering of finance ministers in Brussels.
"People are expecting some word from the European community, for
some solid evidence that they'll provide some help, not just
guidance. If it becomes an open-ended statement without any real
direction or commitment then the market gets a little nervous,"
said Robert Pavlik, chief market strategist at Banyan Partners.
"If we can get a step closer to resolution in Europe, not only
on Greece but on potential help for other countries, then the
market should begin to rally, as it would remove another short-term
question mark that has been overhanging the market," Pavlik
said.
The concerns about debt problems in Greece, along with Portugal
and Spain, had investors pulling out of riskier assets such as
equities and commodities and flocking to investments viewed as
safe, such as the dollar and Treasurys. .
Still, the major stock indexes managed on Friday to end with
weekly gains after a four-week stretch of losses, and economic
reports in coming days could hold some sway with investors and draw
some attention from the issues overseas.
The Dow Jones Industrial Average (DJI) fell 45.05 points, or
0.4%, to 10,099.14, up 0.9% from the week-ago close. The S&P
500 Index (SPX) declined 2.96 points, or 0.3%, to end at 1,075.51,
also up 0.9% for the week, while the Nasdaq Composite Index (RIXF)
added 6.12 points, or 0.3%, to 2,183.53, giving it a weekly rise of
2%.
Exceeding expectations
Of the 379 companies in the S&P 500 that have reported so
far, 73% tallied earnings that beat the expectations of analysts,
according to Thomson Reuters.
And, while the fourth-quarter earnings season is winding down,
the companies still on deck to report include Abercrombie &
Fitch Co. (ANF) and Dow component Kraft Foods Inc. (KFT) on
Tuesday, ahead of Wall Street's open.
Kraft will release its results only two weeks after the food
conglomerate gained control of British chocolate company Cadbury
Plc in a deal valued at $18.4 billion.
Drug companies Merck & Co. (MRK) and Teva Pharmaceutical
Industries (TEVA) are also on tap Tuesday.
In the days ahead, investors will also look for improvement in
data on the housing market along with further confirmation the
recovery is continuing from manufacturing reports.
"If you could see some sign of expansion in the manufacturing
sector, that should help make the case that the economic recovery
is still continuing in the U.S.," said Pavlik.
On Monday, U.S. markets will be closed due to President's
Day.
Tuesday brings the New York Federal Reserve's Empire State Index
for February, along with the National Association of Home Builders'
housing market index, also for February.
After Tuesday's close, Whole Foods Market Inc. (WFMI) and Nabors
Industries Ltd. (NBR) release quarterly results.
The government on Wednesday morning is scheduled to release
January data on housing starts, building permits and housing
completions, along with reports on export and import prices and
industrial production, also for January.
The Federal Reserve on Wednesday afternoon will release the
minutes from its Federal Open Market Committee gathering in late
January, with the words on monetary-policy certain to be carefully
read for further hints as to when and how the Fed would exit from
its record expansion of credit.
In prepared congressional testimony released on Wednesday but
not personally delivered due to the snow that shut down much of the
government, Federal Reserve Chairman Ben Bernanke detailed steps
the Fed might take when it begins to tighten credit. .
Thursday brings weekly jobless claims the producer price index
for January, along with the Philadelphia Fed Index and the January
index of leading economic indicators, followed by the Consumer
Price Index for January on Friday.
Retailers including Wal-Mart Stores Inc. (WMT) and J.C. Penney
Co. (JCP) also report in the days ahead, the former on Thursday and
the latter on Friday.