Coming Week: 'Glimmer of Hope'

Both companies are benefiting from a trend long in the making that is becoming pervasive in the latest earnings results on Wall Street: Overseas economies are booming, while the U.S. is slowing.

Executives at Google, the online search giant that makes 51% of its revenues from overseas markets, told investors that they have seen no evidence that a slowdown in U.S. consumer spending is weighing on their overall business. Even in the U.S., consumers are turning to the Internet for gas-free shopping and entertainment, as they overhaul their budgets.

For his part, Cat CEO Jim Owens said "we're at an unprecedented time in history with North America being so weak and the rest of the world so strong."

Investors would do well to look for companies with heavy international exposure next week, when Wall Street will receive an even larger barrage of first-quarter earnings results. Tech companies like Yahoo! YHOO, Microsoft MSFT, Apple AAPL and Texas Instruments TXN are on tap, along with a slew of consumer products giants, industrial conglomerates, newspaper publishers, airlines and regional banking institutions.

Economic news will be light next week, with few investors even bothering to look at the continued declines in existing home sales, which will be reported on Wednesday, and new home sales on the following day.

Also Thursday, economists are expecting the federal government to report a 0.1% gain in orders for durable goods in March, which would mark a sharp reversal from the 1.7% decline in February.

Friday will bring a fresh revision to the University of Michigan's consumer sentiment index for April, which previously showed a reading of 63.2, its lowest in over a quarter century.

Therein lies the threat to the current pause in the market selloff of 2008. The housing downturn is wreaking havoc on the broader U.S. economy, and this process promises to bring more financial turbulence over time as consumers cut back on spending and credit problems spread beyond mortgage loans.

If U.S. economic conditions worsen, it remains to be seen whether emerging economies around the globe that are boosting profits at multinational corporations will hold up, since they're increasingly tied to the U.S. in this age of globalization. Such concerns led Cat to refrain from boosting its profit outlook for all of 2008, despite the fact that it beat estimates by 12 cents a share in the first quarter. Owens, Cat's CEO, said the U.S. is in the midst of a "recessionary storm" and he expects economies in Western Europe and Japan to slow this year.

"We had a great first quarter, no doubt about it, but it's still early in the year and we're still waiting to see how things play out," he said.

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting