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The Coming Week: Net Positive

Peter Cardillo, chief market strategist at SW Bach, believes corporate earnings will "recharge the rally" next week.

Dow component Alcoa is scheduled to report a 41 cents-per-share profit on Monday compared with 34 cents last year. Nortel Networks and Genentech (DNA) also are on tap Monday.

On Tuesday, Intel is due to report, followed by Apple Computer on Wednesday and Sun Microsystems (SUNW) on Thursday.

Analysts expect Intel to earn 31 cents a share on revenue of $9.4 billion. The company raised its sales estimate for the quarter last month, citing strong demand for servers, chipsets and notebook computers. Apple is expected to post a profit of 48 cents a share compared with just 16 cents last year, as sales of the firm's iPod music player remained strong. Sun should earn a penny after losing 3 cents a share last year.

On average, analysts expect earnings to rise a respectable 15.2% in the fourth quarter. But Briggs said he isn't expecting much reaction from investors. "I don't think we'll rally sharply, but don't think we're going to fall apart either," he said.

While earnings will probably take center stage, a handful of economic reports also could influence trade. Import and export prices and the producer price index, due Thursday and Friday, respectively, will be particularly significant after the Fed said earlier this week that inflation could become a problem unless interest rates continue to go up.

The PPI is expected to fall 0.1%, while the core rate is seen climbing 0.2%. Retail sales for December also will be closely watched. Economists are looking for a gain of 0.7%, or 0.4% excluding autos.

Last month, nonfarm payrolls increased by 157,000, slightly below the consensus estimate of 175,000. In addition, wages rose a meager 0.1%, suggesting that fears of inflation might be overblown.

Other reports of note next week include wholesale inventories on Monday, the trade balance and Treasury budget on Wednesday, and business inventories and industrial production data on Friday.
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