The best investors can hope for these days is a chaotic market -- at least, if "all over the place" seems preferable to "all down."
As the financial services, homebuilding and auto sectors bleed at a frightening pace, it's up to groups such as energy and technology to keep the markets on an even keel with second-quarter earnings and beyond.
The week ahead is chock-full of events in all corners of economics and finance, and experts are preparing for loads of volatility.
The markets will continue to watch the situation with
, which spiraled downward last week after market observers became concerned that the government would have to bail out the two companies.
Speculation is raging
about how dire their situations are, but government officials continue to maintain that the agencies are still financially healthy.
Oil, once again, is also going to be in focus after it ended last week in the mid-$140s. Tensions between Iran and Israel won't help, either, as the situation threatens to plunge the oil-rich Middle East into greater-than-usual turmoil.
"It's our expectation that oil will press higher. We have it at about $160 at the end of the year, until we get some sense of slowing international demand," says Nigel Gault, chief U.S. economist at
Stocks ended on a down note last week, with the
falling 1.7% to 11,100.54, the
tumbling 1.9% to 1239.49 and the
just a tad lower at 2239.08 over the five sessions.
On the scheduled calendar, earnings will come in force next week, dominated by the financial-services industry and the blue chips. Current estimates are for S&P 500 company earnings to be off 10% to 15% or more year over year, though the bulk of the losses are expected in financials.
"I'm actually hoping we get
an earnings preannouncement from a big company and the market sells off," says Brian Rauscher, director of portfolio strategy at
. "That could lead to a tradable bottom" after which a big bounce could follow.
A number of Dow components will report their profit results. On Tuesday,
Johnson & Johnson
are due. Thursday brings
International Business Machines
. On Friday,
On the financial-services front, companies due to report this week include
on Monday, and
Tuesday. Wednesday will feature
, and on Thursday there's
Bank of New York
"Analysts just don't know what these companies are going to report because the companies themselves don't know what's on their balance sheets," says Charles Rotblut, senior market analyst at
. "People thought they had thrown the kitchen sink in there before, but it turns out there was more than one kitchen sink."
The tech sector has its share of news coming out, with
reporting on Wednesday, as well as
Advanced Micro Devices
"There's a little bit of disbelief about what the tech companies are going to do for the rest of the year," Rotblut says. He says weaker-than-expected reports from
Research In Motion
made investors nervous, but he actually thinks the tech sector could help pull stocks out of their slump.
Delta Air Lines
report on Wednesday, and
comes in Thursday. Carriers have been in the news lately for tacking on extra passenger fees and cutting back flights, so their results aren't likely to look very strong.
Other notable reports will come from
If the earnings calendar already doesn't wear out investors, there will be a lot in store on the economic side as well.
The monthly inflation indicators come out, with the producer-price index on Tuesday and the consumer-price index Wednesday, both from the Bureau of Labor Statistics.
"It's still overwhelmingly food and energy" pushing the PPI and CPI higher, says Gault of Global Insight. "The question is, do the core indexes
which don't take into account volatile food and energy prices show some acceleration?"
Chief Ben Bernanke testifies before Congress on Tuesday and Wednesday, and his take on the economy should grab a fair bit of attention. On Thursday, the minutes from the most recent Federal Open Markets Committee meeting will be released.
"People will want to see how close the Fed is to raising interest rates in the face of the inflation risks," Gault says. As for the details of the last Fed policy meeting, he says, "one person voted for a rate hike, so the minutes may give some idea of the balance of the opinion of the rest of the FOMC, and whether people were leaning toward a rate hike."
Other economic data include the Census Bureau's retail-sales report on Tuesday, which may stay fairly strong in the wake of a positive chain-store sales report and amid
. Then on Friday, also from the Census Bureau, building permits and housing starts are likely to be weak as the real estate sector continues to work off heavy inventory.