Weekend Reading: Watch for Consolidation

Welcome to another edition of Weekend Reading. First, let's take a brief look back at the week that just ended and a look forward to the week ahead before getting to a summary of articles and papers worth reading this weekend.

It was a gangbuster week on the major U.S. markets, the best in some time. Some of the worrying about financial stocks faded, while several key earnings results came in better than expected, and economics indicators were no worse than predicted. Of course, it didn't hurt that Google GOOG beat the numbers -- and the bears - with its results after market close Thursday. The upshot: the Dow and the S&P 500 came in up 4.2% and 4.3% respectively, while the Nasdaq ended the week up 4.9%.

Looking forward to next week, there are plenty of crosscurrents, including a growing tide of layoffs in the financial services industry. Earnings probably will continue to remain tepid but far from awful, and so I would look for things to consolidate somewhat. There is enough bad news -- higher oil prices, troubles at UBS UBS and Royal Bank of Scotland RBS, etc. -- that I'm hard-pressed to see how we extend the run markedly higher over the next week.

Turning to economic indicators, next week will be highlighted by U.S. data on both new-and existing-home sales, which will almost certainly be crummy.

Turning to earnings, highlights next week will include Yahoo! YHOO, VMware VMW, McDonald's MCD, DuPont DD and Black & Decker BDK, among many others.

And finally, here are some articles and papers worth reading:

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• Wall Street braces for massive layoffs. (Reuters)
• The TED spread: TED's bogus journey. ( Risk.net)
• Big Oil faces big costs on carbon limits. (Bloomberg)
• Yahoo!'s clock is ticking down on Microsoft MSFT deadline. (Reuters)
• Barron's praises Kimberley-Clark KMB (Barron's)
• Google's tide lifts all online boats. (Advertising Age)
• Disney's DIS magic is newly restored. ( Economist.com)
• Big pension funds are slashing stock investments. (CFO.com)
• The financial turmoil of 2007-?: a preliminary assessment and some policy considerations. (Bank for International Settlements (BIS))
• Books about the current crisis are coming out fast and furious. (New York Times)
• FEDS Abstract 2008-17 -- Expectations of Risk and Return Among Household Investors: Are Their Sharpe Ratios Countercyclical? (Federal Reserve Board)
• Another record low for Bay Area home sales. (San Francisco Chronicle)
• Credit derivatives continue to book. ( Economist.com)
• Iceland losing steams and blames evil hedge funds for a run on the country's currency. (The New York Times)
• The Dell of solar energy ( Fortune)
• New solar ETF launches. (Claymore)
• The charmed dot-com life of Jeff Bezos. (Fortune)
• Interview with Warren Buffett: Says current downturn will be far longer than consensus. (Fortune)
• The Other Orange County: Empty houses and unemployed. (BusinessWeek)
• Stocks are rallying, so it's time to sell. (Bloomberg.com)
• Is oil headed for $200? ( Bloomberg.com)
• Stripping mountains to power D.C. (The Washington Post)
• Behind the UFC's cash machine. (Forbes.com)
• Food prices: The silent tsunami. (Economist.com)
• The lost boys of oil and gas are back. (Globe and Mail)
• Delinquent auto loans are rising quickly. (The Washington Post)
• Resolving the Global Imbalance: The Dollar and the U.S. Saving Rate. (National Bureau of Economic Research (NBER))
• The Forgotten History of Domestic Debt. (NBER)
• A Black Swan in the Money Market. (NBER)
• The Consequences of Mortgage Credit Expansion: Evidence from the 2007 Mortgage Default Crisis. (NBER)

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