The recent earnings drizzle will turn to a downpour in the coming week, while inflation figures and rising tensions in the Middle East could also help create a market tempest. "The stock market has reacted negatively to the attacks traded between Israel and Lebanon because this situation has the potential to be even more explosive, as it may lead to the involvement of Iran and Syria," says Robert Pavlik, chief investment strategist at Oaktree Asset Management. "The potential to disrupt the flow of crude has market watchers fearing that soaring energy prices could cause an extended pullback in stock prices and may lead to a greater slowdown in economic growth." The earnings storm starts on Monday, with Dow component Citigroup ( C) releasing quarterly results before the bell. According to Thomson First Call, analysts expect the mega-bank to post a second-quarter profit of $1.06 a share, up from 97 cents a year earlier, on revenue of $22.68 billion. Also scheduled for Monday are reports from Commerce Bancorp ( CBH), Harley-Davidson ( HDI) and Mattel ( MAT). On Tuesday, the earnings lineup includes corporate giants such as United Technologies ( UTX), Merrill Lynch ( MER) and Coca-Cola ( KO). Internet goliath Yahoo! ( YHOO) is slated to announce results as well. Wall Street is looking for the company to report earnings of 11 cents a share, down from 13 cents a year earlier, on $1.14 billion in revenue. And IBM ( IBM) will be another big tech name in focus Tuesday. Big Blue is expected to post a profit of $1.29 a share, compared with $1.12 a year earlier, on revenue of $21.89 billion. More tech giants will take the stage Wednesday, when Apple Computer ( AAPL), eBay ( EBAY) and Motorola ( MOT) report. Intel ( INTC) also is slated to release results. Analysts predict the chipmaker earned 14 cents a share in the second quarter, down from 33 cents last year, on revenue of $8.3 billion.
Wednesday will also bring reports from General Dynamics ( GD), JPMorgan Chase ( JPM), Abbott Labs ( ABT) and Allstate ( ALL). Thursday will be the busiest day of the week on the earnings front, with a lineup featuring Amgen ( AMGN), Broadcom ( BRCM) and Ford ( F). Also on tap are earnings announcements from Dow components Honeywell ( HON) and Pfizer ( PFE). And once again, big tech players will take the stage after the bell, as powerhouses Microsoft ( MSFT) and Google ( GOOG) release results. Analysts expect Microsoft to report earnings of 30 cents a share for its fiscal fourth quarter, with revenue of $11.63 billion. A year earlier, the company earned 32 cents a share. For Google, Wall Street expects earnings of $2.21 a share, up sharply from $1.36 a year ago, on revenue of $1.64 billion. Friday's earnings highlights include reports from Eli Lilly ( LLY), Caterpillar ( CAT) and Halliburton ( HAL).
More inflation data hits the market on Wednesday with the June CPI, which economists predict will rise by 0.2%, compared with 0.4% in May. The consensus estimate for the core CPI is an increase of 0.2% in June, after a 0.3% rise the prior month. Housing starts for June also will hit the market Wednesday morning. Economists are looking for a rate of 1.915 million starts on an annualized basis, compared with 1.957 million in May. Meanwhile, Bernanke will give his first semiannual monetary policy report to the Senate's committee on banking, housing and urban affairs. "Obviously, the market will be hanging on to his every word for clues as to what the Fed will do in August," says Wachovia's Neuhart, who believes the Fed will pause at its August meeting. "We tend to think he will be dovish, but we've been burned by him before." Bernanke will be speaking to the House Committee on financial services on Thursday. Leading indicators for June will be revealed on Thursday as well. The consensus estimate is for a rise of 0.1%, compared with a drop of 0.6% the prior month. The Philadelphia Fed survey is also on tap for Thursday, along with the minutes from the June FOMC meeting.