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The Coming Week: Earnings May Take a Back Seat to Data Deluge

Quarterly reports from AOL and several Dow components are on tap. The GDP data and the jobs report are also due.

Another wave of fourth-quarter earnings, a batch of key economic reports and a meeting of the

Federal Open Market Committee make for a bustling calendar in the coming week.

Signs of bottoming in the economy and in corporate earnings have started to accumulate in recent weeks, and further good news about 2002 could push stocks higher. However, until investors get tangible evidence that a recovery is at hand, the market may be somewhat directionless. After two weeks of declines, the major averages made a minimal advance last week.

"Things are improving, but not fast enough," said Subodh Kumar, chief strategist at CIBC World Markets. "At the bottom, that's what happens." The strategist expects the

Nasdaq to make a run for the 2000 mark and the

Dow to head back toward 10,000.

But he doesn't expect them to advance far beyond that. "We don't have enough good news for stocks to move above those ranges, but we don't have enough bad news to take them lower," he said.

Round Three

Earnings season cools off a little in the coming week, with a slimmer reporting schedule than in the previous two. About 16% of the

S&P 500 firms report earnings next week, or 80 companies, compared with 150 companies last week and 113 companies the previous week.

Some of the biggest names on next week's calendar include Dow components

American Express

(AXP) - Get American Express Company Report



(KO) - Get Coca-Cola Company Report


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Philip Morris

(MO) - Get Altria Group Inc Report


Procter & Gamble

(PG) - Get Procter & Gamble Company Report


High-profile tech and communications outfits reporting are

Texas Instruments

(TXN) - Get Texas Instruments Incorporated Report


Veritas Software

(VRTS) - Get Virtus Investment Partners, Inc. Report


AOL Time Warner




(T) - Get AT&T Inc. Report



(VZ) - Get Verizon Communications Inc. Report


Number Crunching

On the data front, investors get December

durable goods orders Tuesday, an advance estimate of fourth-quarter

gross domestic product and the FOMC meeting Wednesday, and most importantly, the January

employment report. The January

purchasing managers' index, or PMI, is due Friday.

In light of recent signs of improvement, some economists were optimistic the data could start showing positive growth.

Consensus figures call for a decline of 60,000 in payrolls in January, The PMI, which measures manufacturing sector activity, hit 48.2 in December, up from 39.8 in October. A reading of above 50 indicates expansion. Economists polled by


were expecting a reading of 49.5.

Kumar suggested that fourth-quarter GDP might register positive growth, despite consensus estimates for a 1.1% contraction. "This would provide a huge lift to investor psychology," he said. "It would help allay fears that the market is going to test new lows because we weren't getting recovery." The economy contracted for the first time since 1993 in the third quarter of last year, and the layman's definition of a recession is two quarters of negative growth.

Durable goods orders is another key report as investors try to gauge whether the demand end of the economy is picking up. The report measures the value of orders received by manufacturers for goods designed to last three years or more, such as washing machines.

After 11 interest rate cuts last year, the FOMC meets Tuesday and Wednesday to determine whether another one is in order. But after

Fed Chairman Alan Greenspan's

testimony before the Senate Budget Committee, Wall Street is overwhelmingly expecting rates to remain unchanged.

In his testimony,

Greenspan revised a previous speech, omitting key passages that were widely cited as proof of his pessimism about the state of the economy.