Coming Week: Don't Expect Fireworks

A fierce growl emanating from Wall Street likely will drown out the July Fourth fireworks for investors this weekend.

At the onset of the third quarter, the Dow Jones Industrial Average and Nasdaq Composite index entered bear market territory for the first time since 2003 on Wednesday.

That milestone is the culmination of a now nearly year-long credit crunch that has choked markets since last summer. It has stifled the once red-hot M&A market, and that, along with soaring costs for energy and raw materials, has sent equities into a tailspin that shows little sign of abating.

Now, with the second-quarter earnings season set to kick off in earnest Tuesday, with Alcoa's(AA - Cramer's Take - Stockpickr) report after the bell, investors are left wondering when the carnage might end.

"I think the expectations are pretty low," says Art Hogan, chief market strategist for Jefferies & Co. "I don't think anyone expects much upside guidance from corporate America."

Tradition defines a bear market as a decline in at least two major indices of 20% or more. At the close of Thursday's abbreviated trading session heading into the three-day Independence Day weekend, the Dow stood at 11,288.54, a 20.3% decline from the record close of 14,164.53 on Oct. 9. The Nasdaq closed at 2,245,38, a 21.5% decline from its 52-week high of 2,859.12 on Oct. 31.

The steep drops in the Dow and Nasdaq were not the only benchmarks achieved in the shortened holiday week. Crude oil prices soared to a new intraday record of $145.85 a barrel Thursday, before light, sweet crude for August delivery closed at a record $145.29.