Updated from 1/29/2011 with latest news from Egypt.
NEW YORK (
) -- Should investors be bracing themselves for a further correction in the coming week?
Between the escalating crisis in Egypt, the ongoing earnings season and a crucial nonfarm payrolls report, there will certainly be plenty of market-moving headlines to influence equities trading.
After rising to key psychological levels on an intra-day basis during the week on the back of strong earnings,
stocks plunged on Friday
as investors worried that
tensions in Egypt
would spread to other countries in the Middle East, including the major oil-producing nation of Saudi Arabia. Anti-government protests have already spread to Yemen, Algeria and Jordan.
Egyptian President Hosni Mubarak
appointed Omar Suleiman, the head of the country's intelligence services, as vice president, according to media reports. As riots and protests continued into Sunday, Egypt's information minister ordered the suspension of operations of
, revoking its licenses and withdrawing accreditation for its staff.
| A protester is seen in the streets amid civil unrest in Suez, Egypt, Friday, Jan. 28, 2011. Tens of thousands of anti-government demonstrators poured into the nation's streets.
Dow Jones Industrial Average
snapped its eight-week winning streak, losing 0.4% over the week to close at 11,824. The
also failed to hold above 1300, slipping 0.5% over the week to 1276.
Geopolitical tensions instead caused investors to bid up the price of oil by more than 4% to $89.90 a barrel on Friday. Traditional safe havens -- gold, the dollar and treasuries -- also snapped back into favor.
Market experts are debating whether Friday's fall was a mere technical correction after a long, uninterrupted rally or if more weakness is in store.
Lawrence Creatura of Federated Investors believes stocks have been grinding higher on the back of a healthy earnings backdrop, but global concerns could derail the upward trend.
"Share prices have been moving up because we have earned it. The tone of the results reported so far has been [largely] positive and any pullback will have to overcome that positive tone," he said, adding, "In terms of catalysts for correction, though, there are a lot of candidates outside our borders including Middle East tensions, Chinese inflation and Europe uncertainty."
Peter Cardillo of Avalon Partners believes the Egypt crisis could be a "curveball" for the markets if it spreads to Saudi Arabia.
"The unrest we are seeing in Egypt now, who knows who could be next?," said Cardillo. "We are dealing with countries in the Middle East. The oil-producing countries are at risk. If it should spread to Saudi [Arabia] or Kuwait, we could see some drastic moves, upward pressure on oil markets on the back of geopolitical tension."
In the United States, investors will have a flood of economic data to digest in addition to a stream of earnings reports.