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Update includes news that Kraft is close to sealing a takeover deal with Cadbury.
NEW YORK (
TheStreet) -- Market watchers will begin next week much how they ended the last: with an intensive focus on banking and technology company earnings.
Each of the major averages lost ground last week. The
Dow shed almost 0.1%, while the
S&P 500 declined by 0.8% and the
Nasdaq tumbled 1.3%.
U.S. markets will be closed Monday in observance of Dr. Martin Luther King Jr. Day. But a full slate of quarterly reports will be coming the rest of the week.
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Both large and regional financial sector players are set to report, including
Citigroup(C - Get Report),
Bank of America(BAC - Get Report),
Wells Fargo(WFC - Get Report),
Morgan Stanley(MS) and
The past week was not a kind one for the banks. To wit, the CEOs of four major institutions were grilled by the
Financial Crisis Inquiry Commission last Wednesday. By Thursday,
President Obama announced plans to tax the biggest banks in an effort to recoup costs associated with $700 billion bailout package. And that news came amid increasing frustration on Main Street over increasing banker bonuses.
By the end of last week,
JPMorgan Chase(JPM) announced that it beat profit forecasts. But the Dow tumbled 101 points, or 1%, to finish at 10,610 on Friday
amid some murkier signs that weighed on the banking sector.
Michael Pento, chief economist at Delta Global Advisors, says he'll be looking closely next week to see whether the banking sector's first major report is indicative of a trend.
"Let's look at JPMorgan. They beat on the bottom line but their revenue number stunk," Pento says. "So, can we continue to burn our furniture to keep the house warm? Eventually, the top-line revenue has to increase. Sales have to increase or we're going to see a market decrease in the earnings power of our corporations."