Is the worst finally over or, as Larry David might say, should investors curb their enthusiasm?

U.S. stocks closed sharply higher on Friday, ending a five-day losing streak. Leading the charge were energy stocks, as oil prices surged on rumors that squabbling OPEC members might finally agree to tighten the spigots.

Both the Dow Jones Industrial Average and the S&P 500 rose 2% on Friday, ending a brutal week. However, despite last week's upbeat denouement, the major U.S. indexes remain down more than 8% for the year, declining 1% last week alone.

The big question in the week ahead: have oil prices and stocks bottomed, or was Friday's upturn a dead cat bounce? We'll get important clues in coming days.

Several major energy companies report earnings this week, including Cheniere Energy (LNG - Get Report) , Devon Energy (DVN - Get Report) , Enbridge (ENB - Get Report) , Linn Energy (LINE) , and Cabot Oil & Gas (COG - Get Report) . On Friday, indications that Saudi Arabia might be successful in walking back its disastrous price war sent benchmark U.S. crude to $29.44 a barrel, a rise of 12.3%.

That said, the oil and gas sector remains troubled and several energy stocks are among the most dangerous investments today. Case in point: Deeply indebted Chesapeake Energy (CHK - Get Report) last week had to deny rumors that it faced a "Lehman moment" and was about to file for bankruptcy.

In the holiday-shortened week ahead, we'll see whether the economy can provide sufficient fuel for a lasting market rebound. Notably, statistics are due on housing starts, industrial production, and jobless claims.

Also cheering investors on Friday was a report from the U.S. Commerce Department that consumer spending resumed its upward trajectory and increased 0.6% in January. The positive sales report exceeded expectations and suggested that consumers are shrugging off any anxieties about wildly gyrating financial markets. Can the spending mood of American shoppers last? We'll get insights this week, when consumer spending bellwethers Nordstom (JWN - Get Report) and Wal-Mart (WMT - Get Report) report earnings and Bloomberg releases its latest consumer comfort index.

Earnings Reports:

Monday, February 15, President's Day: Markets Closed. Tuesday: Acadia Healthcare (ACHC - Get Report) , Devon Energy, Express Scripts (ESRX) , Liberty Global (LBTYA) , TransUnion (TRU - Get Report) . Wednesday: Analog Devices (ADI - Get Report) , Barrick Gold (ABX) , EZChip (EZCH) , T-Mobile US (TMUS - Get Report) , Vermillion Energy (VET - Get Report) . Thursday: Cheniere Energy, Duke Energy (DUK - Get Report) , Enbridge , Linn Energy, Melco Crown Entertainment (MPEL) , Nordstrom, Wal-Mart, Washington REIT (WRIT) . Friday: Cabot Oil & Gas, Deere (DE - Get Report) , Pinnacle West (PNW - Get Report) , and US Cellular (USM - Get Report) .

Economic Data:


MBA Mortgage Applications
Housing Starts
Industrial Production


Jobless Claims
Bloomberg Consumer Comfort Index
Leading Indicators
EIA Natural Gas Report
EIA Petroleum Status Report


Consumer Price Index
Baker-Hughes Rig Count

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John Persinos is editorial manager and investment analyst at Investing Daily. At the time of publication, the author held no positions in the stocks mentioned.