This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

European Threats to Battle Earnings in Coming Week

Stocks in this article: AA SNX WDFC CVX LEN JPM


NEW YORK ( TheStreet) -- Investors anticipate another strong U.S. corporate earnings season, but any positive results will once again have to battle entrenched fears related to the European debt crisis.

In the first week of 2012 trading, stocks closed mixed most days as investors tried to cling to New Year's optimism in the face of expanding European fears. In the first three days of trading, stocks were only able to rebound after the close of European markets allowed investors to focus on positive U.S. jobs data.

Friday's drop in the U.S. unemployment rate to its lowest level in almost three years wasn't enough to break Europe's hold on sentiment.

Despite the unofficial start of corporate earnings season Monday afternoon, uncertainties in Europe will continue to hold their grip. Spain and Italy -- the two eurozone economies seen most at risk of joining Greece, Ireland and Portugal in the debt crisis -- will test investor sentiment next week as they issue bonds at auction. Spain hopes to issue three- and five-year bonds on Thursday, while Italy will follow on Friday with an auction of bonds and floating-rate notes.

> > Bull or Bear? Vote in Our Poll

In the U.S., the market will kick off the week on Monday with a report on consumer credit for the month of November. The Federal Reserve is expected to report that U.S. consumer credit increased by 7%, according to a survey by Thomson Reuters. The measure of debt rose for a second straight month in October, adding 3.7%.

After the close of trading on Monday, Alcoa (AA) will unofficially kick off fourth-quarter corporate earnings season. Analysts expect the largest aluminum producer in the U.S. to report earnings of 1 cent a share, according to a survey by Thomson Reuters, representing a 95% drop from 2010's fourth-quarter earnings of 21 cents a share.

Tuesday will bring the Commerce Department's report on wholesale trade inventories for November. Wholesale inventories are expected to rise 0.5% while wholesale sales are expected to gain 0.8%, according to forecasts from Thomson Reuters. Wholesale stockpiles grew 1.6% in October as companies anticipated rising consumer demand. Sales at the wholesale level increased 0.9% in the month.

The early hours of trading on Wednesday will likely be dictated by headlines out of Europe as Italian Premier Mario Monti and German Chancellor Angela Merkel meet in Berlin in an effort to calm the region's debt crisis.


Wednesday afternoon, investors will keep an eye out for the Federal Reserve's Beige Book. Formally called the Summary of Commentary on Current Economic Conditions by Federal Reserve District, the Beige Book is published eight times a year, usually two weeks before the Federal Open Market Committee meeting, to summarize anecdotal information from businessmen, economists and market experts on the strength of the economy.

Thursday morning will bring the Labor Department's weekly read on initial jobless claims for the week ended Jan 7. Economists expect initial claims to rise to 375,000, after falling 15,000 to 372,000 the prior week.

Retail sales will also spark interest Thursday morning as the Commerce Department announces data for December, the biggest holiday spending month. Economists expect sales to have risen a meager 0.2% last month after gaining the same amount in November.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs