By Kate Gibson
NEW YORK (MarketWatch) -- The U.S. stock market could be stuck
in neutral as it begins a holiday-shortened week, with investors on
the prowl for catalysts for stocks to resume their autumn rise in
earnest.
"Basically the market is in a news vacuum; earnings were good
and over, the election was good and over," said Keith Springer,
president of Springer Financial Advisors in Sacramento, Calif.
"We're having a little correction, or as I like to call it, the
pause that refreshens," he commented of the market's stall that had
the major indexes on Friday finishing near flat for the week. They
had fallen the prior week.
Stocks in recent sessions were tugged by better-than-anticipated
corporate profits and worries about a slowdown in the global
economy related to China, which ended the week directing its banks
to hike reserves in a bid to curb inflation. Shifting sentiment
about a potential Irish bailout also played a role during a choppy
week.
Helped by a late-session rally Friday, the Dow Jones Industrial
Average (DJI) finished the week up 0.2%, a performance that masked
triple-digit swings in two of the five sessions.
The S&P 500 Index (SPX) edged up 0.04% and the Nasdaq
Composite (RIXF) ended flat.
Wall Street on Tuesday took its biggest daily hit in nearly
three months on concern that Ireland's debt trouble might spread
and about Chinese moves to slow its economy. But stocks rebounded
Thursday, recouping the bulk of losses.
Springer, for one, played down the importance of Ireland's bank
troubles, saying "if that news had hit when our earnings were
coming in, it would have been page five or page six news."
That said, Springer is bullish on U.S. equities, at least in the
near term, saying "as long as earnings estimates are continuing to
go up, stocks will continue to rise."
The week also included the second-largest initial public
offering in U.S. history, when General Motors Co. (GM.XX) returned
to the New York Stock Exchange. GM shares rose 0.2% Friday,
extending the prior session's 3.6% gain.
Hewlett-Packard, Deere
While the peak weeks of the third-quarter earnings season are
over, the next four weeks will bring results from the 19 that
remain.
In the coming week, nine S&P 500 companies are scheduled to
announce results, along with Dow component and personal-computer
maker Hewlett-Packard Co.(HPQ), which is slated to report on
Monday, along with Analog Devices Inc. (ADI) and Tyson Foods Inc.
(TSN)
The heaviest earnings day for the week will come Tuesday, with
Campbell Soup Co.(CPB), Hormel Foods Corp. (HRL), Medtronic Inc.
(MDT) and Patterson Companies Inc. (PDCO) on tap.
Finally, investors can expect results on Wednesday from upscale
jeweler Tiffany and Co. (TIF) and farming-equipment manufacturer
Deere & Co. (DE)
More growth is in the cards. The estimated earnings growth rate
for the S&P 500 for the fourth quarter of the year is 31%,
according to Thomson Reuters analyst John Butters. From then, the
estimated growth rates are 11%, 10% and 12% through the third
quarter of 2011.
Data points
With a strong possibility of little news to sway investors in a
trading week shortened by Thursday's Thanksgiving holiday, the
economic data could take on added significance, analysts said.
On Tuesday, the government is scheduled to release its second
report on third-quarter economic growth, which is expected to show
an upward revision to 2.4% from 2%.
Also Tuesday is a gauge of regional manufacturing activity from
the Richmond Federal Reserve, which analysts largely expect to have
held steady.
"Such a reading would be down significantly from the clearly
unsustainable spike in second-quarter 2010, but still above the
long-term average," T.J. Marta, chief market strategist at Marta on
the Markets, wrote in a note.
Wednesday is slated to bring numbers on personal income for
October, with many analysts looking for a 0.4% month-to-month rise,
while spending is expected to have climbed 0.5%, with both above
the long-term average, Marta said.
The government's measure of inflation, based on changes in
personal consumption, is also slated for release Wednesday. The
final Reuters/University of Michigan consumer-confidence reading
for November is also due one day ahead of the holiday, with many
analysts looking for the index to rise to 69.5 from 69.3 -- a level
which, prior to 2008, has not been hit since 1992, according to
Marta.
Three separate reports on housing were expected to show the
industry remains in depressed, albeit stable conditions.