With the presidential inauguration in the rear-view mirror, investors must now roll up their sleeves and get to work on sorting through a glut of earnings releases and economic data expected in the coming week.
Oh, and President Barack Obama's $825 billion stimulus plan will go to a vote in Congress, and the confirmation of Treasury secretary nominee Timothy Geithner is anticipated.
If you thought this holiday-shortened week was a wild ride for the stock market, the worst may be yet to come.
"Next week is going to be a very busy week," says Chip Hanlon, president of Delta Global Advisors. "There's a lot of data and all of it is expected to be crummy. The only question is whether it's a little less crummy than expected. And that possibility exists. It's possible we could see a little relief if we see some data that's not quite as bad as we're expecting."
Perhaps the biggest catalyst for the stock market will be the proposed stimulus plan, which overcame a significant hurdle Thursday when it was passed by the House Appropriations Committee. The Senate Finance Committee said it will consider the package on Tuesday, and House Speaker Nancy Pelosi expects to bring the plan to the floor this week. President Obama says that Congress is on target to approve the plan by the President's Day holiday on Feb. 16.
"The market has been looking forward to getting this stimulus package out of the way for quite some time. How long have we been talking about this?" asked Paul Mendelsohn, chief investment strategist with Windham Financial. "The market reacts negatively to uncertainty, and this has been what has put it under pressure."
Hanlon said he's not convinced the market is entirely keen on the idea of the stimulus plan. "The market looks forward, and it's not like the market has thrown a party yet for this thing," he said. "The more the market finds out about this plan, the more it seems to dislike it."
Investors will also keep a close eye on the confirmation hearing of Geithner, who was approved by a Senate panel Thursday after a grilling Q&A session. Most observers believe the full Senate will approve him -- despite a
-- and some believe that stocks could receive a boost.
"We've had no Treasury secretary since Tuesday, so Geithner being put into place is important," said Mendelsohn. "It's also significant that Obama is meeting with his economic team over the weekend to brainstorm. The market might start looking forward to positive news on Mondays, unlike when we had the banking crises."
The crown jewel of economic data will come from the
on Wednesday at 2:15 p.m. EST, when the central bank will deliver its decision on interest rates following a two-day meeting by the Federal Open Market Committee. At the Fed's December meeting, the group established a target range for the federal funds rate of zero to 0.25% in order to combat weak economic conditions, leaving many to question what steps, if any, the Fed could take next.
"I don't know really what else they can do, except to indicate their continued willingness to pump money into the supply," said Robert Pavlik, chief market strategist with Banyan Partners. "They essentially can't lower rates any further. I don't know if it's going to be as big a deal as it's been in the past because we don't know what else they can come up with for their statement."
Away from the Fed's rate decision, traders and investors will still have plenty of other data to sift through. On Monday, reports on existing-home sales and leading economic indicators for December will come out, while Tuesday will bring the January read on consumer confidence.
Thursday includes durable goods and new-home sales data for December, as well as the weekly report on jobless claims. Friday's docket is also full, with the advance report on gross domestic product for the fourth quarter, as well as the January reads for the Chicago Purchasing Managers' index and the University of Michigan's revised report on consumer sentiment.
Pavlik argues that the jobless claims could spur the biggest reaction by the stock market, considering it is the most timely of all the reports due in the coming week.
"If you see a continued expansion of the initial unemployment claims, that could continue to pressure the market because it continues to highlight the problems in the economy," said Pavlik. "When you continually have 500,000 people going for unemployment all at one time, you start to realize that it's an enormous amount of people."
Ultimately, the spotlight will fall on earnings, as 12 of the
Dow Jones Industrial Average's
30 components are set to report quarterly results over the next five sessions. On Monday,
are on tap to deliver their earnings releases.
are due to report early Tuesday.
will deliver their reports on Wednesday.
is the lone Dow member to report quarterly results on Thursday, and
Procter & Gamble
are expected Friday.
Several different sectors of the market will be well represented in the flurry of other earnings reports next week. John Butters, research analyst with Thomson Reuters, says that in addition to the Dow components, earnings releases from more than 120 constituents of the
will arrive over the next week, making this the "peak week of earnings season."
"This past week was more heavily skewed to the financials and technology area," Butters said. "Next week, it's really across the board. You'll hear from a broad range of sectors."
Among oil and gas stocks,
are set to report quarterly earnings.
Earnings from consumer-related companies will also come in fast and furious.
, among others, are all due to release results.
Among technology stocks,
will report quarterly results over the next five sessions, in addition to Internet-related companies
Biopharma and drug companies will also be out in force, with
ready to deliver their earnings.
Several airline companies will be out with reports, including
Delta Air Lines
. Additionally, basic materials companies such as
will report earnings.