NEW YORK (
) -- Investors will be inundated with earnings once again next week but should pause to gander at the Federal Open Market Committee's rate decision statement on Wednesday as well as Friday's reading on fourth-quarter economic growth.
"So far 60 companies have reported results, 43 have surprised on the upside but only 23 companies saw their stocks react positively to the news, so it seems people are taking the news but looking for reasons to sell," said Nino Jimenez, senior vice president at Brinson Patrick, adding that while earnings point to improving conditions, the stock market has rallied so much recently that people may be bracing for a pullback.
Still, Jimenez expects earnings to be the market's main driver next week.
With no new economic releases scheduled for Monday's session,
will share the spotlight as both are scheduled to report before the start of trading. According to Briefing.com, analysts expect earnings of 63 cents and $1.15 a share, respectively. After the close,
will come into view. Analysts anticipate earnings of 94 cents and 63 cents, respectively.
Tuesday's session kicks off with two pieces of November housing market data: Standard & Poor's Case-Shiller 20-city home price index and the Federal Housing Finance Agency home price index. The main draw, however, will likely be the Conference Board's read on January consumer sentiment.
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"The last number was a disappointment, coming in weaker than expected
at 52.5 in December, but the expectation here is that it may have been an aberration, and the market is looking for an improvement," said Christian Hviid, chief market strategist for Genworth Financial Asset Management. According to Briefing.com, the market had expected confidence to climb to 56.1 in December, from 54.3 in November.
Also on Tuesday, members of the
monetary policy-setting arm convene for a two-day meeting that will conclude with the release of its rate decision statement at 2:15 p.m. EST on Wednesday. Although most economists aren't anticipating any changes to rates or the Fed's asset-purchase program, the statement will still be evaluated for alterations to the assessment of economic conditions or for hints of future policy moves.
"I don't expect any changes from the Fed. The last two employment reports still sent mixed messages," said Peter Tuz, president of Chase Investment Counsel.
Joseph LaVorgna, chief U.S. economist at Deutsche Bank, said policymakers may slightly upgrade their assessment to acknowledge firming economic data, but he added that because stronger labor conditions are needed to significantly shift expectations, any changes are likely to be minor.
"Perhaps the most notable development when the statement is released on Wednesday afternoon will be vote count given the new mix of voting FOMC members in 2011," he said.
Genworth's Hviid agreed that the market will be eager to see where the new voting members stand.
"We might start hearing more concerns from members -- particularly some of the new members who may be more hawkish -- regarding what the Fed is going to do down the road ... if not at this meeting, then certainly the next one," Hviid said.
"Over the past year, there's been one, consistently dissenting member, but I think you might start seeing more people joining the bandwagon," he said, pointing to Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, who is no longer on the FOMC's voting roster.
On Wednesday, the market gets new-home sales data for December from the Commerce Department. Economists are forecasting an increase to 300,000, from 290,000 in November.
Johnson & Johnson
report on Tuesday, followed by
The midweek mark also brings results from
Investors may take a break from earnings to focus on Thursday's initial jobless claims data after claims fell to a better-than-expected level of 404,000 this week.
Also on tap for Thursday's morning session, are December durable goods orders and November pending home sales.
The earnings parade continues on Thursday with results coming from
Bristol Myers Squibb
After the bell,
report. According to Briefing.com, analysts are anticipating earnings of 88 cents and 68 cents, respectively.
On Friday, the market will get an advance estimate on fourth-quarter gross domestic product from the Commerce Department, and a final read on January consumer sentiment from the University of Michigan. Wall Street is projecting fourth-quarter GDP growth of 3.8%, which would follow growth of 2.6% in the third quarter.
Earnings taper off by the end of the week with
likely to be Friday's headliners. Chevron is expected to report earnings of $2.40 a share while Honeywell is seen posting a profit of 87 cents a share.
Written by Melinda Peer in New York
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.