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Coming Week: Chief Speak

Greenspan's last FOMC meeting and Bush's State of the Union address will overshadow earnings.

Traders are bracing themselves for another tidal wave of earnings in the coming week, but some say it is the


that could really soak investors if it maintains its tough talk on interest rates.

"If the market continues to rally into the FOMC meeting and the Fed keeps up its aggressive stance on rates, then you could see a lot of profit-taking," says Al Goldman, chief market strategist at AG Edwards.

The Fed will make its policy statement on Tuesday at 2:15 p.m. EST, in the last meeting overseen by Alan Greenspan as chairman. Greenspan, who will be replaced in the top spot by Ben Bernanke, is expected to bless the Fed's 14th straight quarter-point hike in the benchmark fed funds rate, bringing it up to 4.5%.

Analysts were fairly confident that the Fed would maintain its tightening bias through its March meeting. However, after Friday's lower-than-expected gross domestic product number, the odds that the Fed will hike rates dropped sharply.

The initial GDP reading showed annualized growth of just 1.1%. The government's main gauge of broad economic output was expected to rise by 2.8% in the quarter, after jumping 4.1% in July through September.

After the report, fed funds futures showed the odds of a quarter-point hike at that meeting falling to 60% from 76%, according to Miller Tabak data.

"With lower-than-expected growth, it makes the job a lot easier for the Fed -- especially with its two new Bush-appointed members -- to pause from its rate-hiking plan," says Paul Mendelsohn, strategist at Windham Financial.

The Fed policy statement won't be the only big announcement of the day. President Bush will be delivering his State of the Union address on Tuesday night, and analysts say it could have severe market implications. The speech could especially affect energy shares, depending on what Bush says about his plans to address Iran's nuclear ambition. Oil has climbed in recent weeks to nearly $70 a barrel as tensions over Iran have increased.

"The action in equities has been impressive in the face of the uncertainty in the Middle East and surging energy and commodity prices," says Randy Diamond, sales trader at Miller Tabak. "And even the mixed earnings news we've gotten so far has not derailed the train. But look out, because volatility is back."

More big news coming from Washington next week will be the nonfarm payroll figures for January, which arrive on Friday. Economists surveyed by Thomson First Call expect the economy to have added 245,000 jobs, up from December's disappointing 108,000.

Rich Yamarone, economist at Argus Research, has been somewhat bearish on payroll data over the past year, but this time he expects the number to come in on the high side.

"Retailers did not go overboard in hiring new employees this holiday season," says Yamarone. "So there will be no seasonal adjustment to worry about this time around."

More Earnings Ahead

Before the Maestro takes his final bow on Tuesday afternoon, the earnings symphony already be well past the overture. On Monday, the market will have profit data from the likes of


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Eastman Kodak



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Considering all the craze surrounding stock exchanges recently, traders will certainly tune in to the results from the

Nasdaq Stock Market


, which reports Monday, and

Archipelago Holdings

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, which takes the stage on Tuesday. Analysts surveyed by Thomson First Call expect the Nasdaq to have earned 13 cents a share, up from 2 cents last year, on revenue of $195 million. The expectation is for Archipelago to earn 24 cents, down from 26 cents last year, on $126 million in sales.

Aside from Archipelago, Tuesday's reports include

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U.S. Steel

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But the major focus will be on a profit report from search giant


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, as investors look to see if the company's rapid growth continued in the fourth quarter at a pace sufficient enough to meet Wall Street's lofty expectations. Analysts are expecting Google to report earnings of $1.76 a share and revenue of $1.29 billion, up from a year-earlier profit of 92 cents a share, before items, and revenue of $654 million.

The earnings storm continues to rage on Wednesday, with releases from companies including


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Pulte Homes

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Activist investor Carl Icahn will be able to see if his

Time Warner


maneuverings have been effective when the media company releases fourth-quarter earnings Wednesday. Analysts expect Time Warner to post EPS of 22 cents, up from 20 cents last year, on revenue of $11.87 billion.

The momentum is maintained on Thursday, with reports from


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Electronic Arts






The action is slower on Friday, but there still will be a few earnings releases for investors to pore over, including

British Airways

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