By Wallace Witkowski, MarketWatch

SAN FRANCISCO (MarketWatch) -- Taking the long-term view is probably the best course of action for investors given the weakness of first-quarter results as we head into the peak week of first-quarter earnings season with reports from heavyweights like Apple Inc., Microsoft Corp., and AT&T Inc.

Stocks ended the holiday-shortened week with their best weekly gain in nine months on mixed earnings in the tech and financials sectors. The Dow Jones Industrial Average (DJI) and the Nasdaq Composite Index (RIXF) both finished up 2.4%, while the S&P 500 Index (SPX) gained 2.7%.

As we enter one of the weakest earnings seasons in several quarters, one encouraging sign for market history buffs is that the S&P 500 rallied to show a slight gain for the year just before Easter after starting last week in the red.

With regards to earnings, Brian Belski, chief investment strategist at BMO Capital Markets, said investors need to take a longer view on stocks and not just jump from earnings season to earnings season.

"I think investors in general make a huge mistake in companies, building a strategy on quarterly earnings alone," said Brian Belski, chief investment strategist at BMO Capital Markets. "The recovery is more of a marathon than a sprint."

No sense getting myopic now

That sort of long term view is backed up by a recent analysis from Jeffrey Kleintop, chief market strategist at LPL Financial. Kleintop notes that we're currently in the weakest earnings cycle in 55 years with an annualized growth rate of 2.8% since the last market peak in the second quarter of 2007. The average growth rate is 7.8%.

While investors have been concerned that valuations have been getting ahead of earnings, Kleintop notes that for the most part, earnings have kept pace with valuations since June 2007 with S&P 500 earnings per share growing 21% and the S&P 500 also growing 21%.

Still, a further rise in stocks will have to be on the back of earnings growth, and while not as evident in first-quarter earnings, the rest of the earnings year will be decisive in determining the course of the market.

Even though only 16% of the S&P 500 has reported earnings this season, outlooks are looking less negative than usual, especially since they've been more negative than average recently. With 15 S&P 500 companies having given an outlook for the second quarter so far, only 9, or 60%, have issued an earnings guidance that falls below the Wall Street consensus, according to John Butters, senior earnings analyst at FactSet. While still early in the game, that's below the five-year average of 65%, according to Butters.

As always, outlooks will be key heading into this peak week to get an idea of how Corporate America sees its growth prospects after a first quarter marred by bad weather. While first-quarter earnings for the S&P 500 are expected to decline 1.3% from a year ago, they're currently expected to grow 7.6%, 10.7%, and 11% for the second, third, and fourth quarters, respectively, for a 2014 growth rate of 8.2%, according to Butters.

BMO's Belski suggests focusing on companies that have higher quality earnings, those where cash earnings represent a larger portion of reported earnings per share and rely less on accounting tricks. Those companies tend to perform better over the long term regardless of the earnings environment, returning an average compound annual growth rate of 14.3% since 1990, compared with the 9.8% return for the S&P 500, Belski notes.

Companies that fall into that category reporting this week include Halliburton Co. (HAL), Qualcomm Inc. (QCOM), AbbVie Inc.(ABBV), and Gilead Sciences Inc. (GILD)

One of the advantages of not getting caught up in the short term is that a market correction is long overdue and that investors are more and more divided into two camps: that of complacency and that of expecting a big drop of more than 10% any day now.

"This year could be a sell in April," Belski said. "Corrections tend to happen when people least expect them." For his part, Belski maintains his 1,900 S&P 500 target for the year, meaning when all is said and done, he only expects the index to gain another 1.9% by the end of the year.

From a tactical perspective, over the next six to 12 months, Belski suggests that the energy, health care, industrials, and tech sectors could offer attractive opportunities, as shown in the chart below:

Highlights of earnings peak week

This week is the peak of earnings season with 11 Dow components reporting and more than 150 components of the S&P 500 posting results.

Telecom will figure heavily with 93% of the sector's market cap weight reporting with earnings from Dow components AT&T (T) on Tuesday and Verizon Communications Inc. (VZ) on Thursday.

It will be another big week for tech earnings with 48% of the sector's market cap weight reporting as Apple (AAPL), Facebook Inc. (FB), and Texas Instruments Inc. (TXN) post results on Wednesday, and Dow component Microsoft (MSFT) reports Thursday.

Industrials round out the Big 3 of sectors reporting with 47% of the sector's market cap posting results this week with United Technologies Corp. (UTX) on Tuesday; Boeing Co. (BA) and Dow Chemical Co. (DOW) on Wednesday; with 3M Co.(MMM) and Caterpillar Inc. (CAT) on Thursday.

Other big names rounding out the week include Netflix Inc. (NFLX) and Kimberly-Clark Corp. (KMB) on Monday; McDonald's Corp.(MCD) , Travelers Cos.(TRV) , Amgen Inc.(AMGN) , Intuitive Surgical Inc.(ISRG) , and Comcast Corp. (CMCSA) on Tuesday; Procter & Gamble Co. (PG) , Biogen Idec Inc.(BIIB) , and Yum Brands Inc. (YUM) on Wednesday; Visa Inc. (V) , Amazon.com Inc. (AMZN) , Starbucks Corp. (SBUX) , Altria Group Inc. (MO) , Nasdaq OMX Group Inc. (NDAQ) , Eli Lilly & Co. (LLY) , and General Motors Co. (GM.XX) on Thursday; with Moody's Corp. (MCO), Colgate-Palmolive Co. (CL) , Whirlpool Corp. (WHR) , and Ford Motor Co. (F) on Friday.

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