By Wallace Witkowski, MarketWatch

SAN FRANCISCO (MarketWatch) -- For stocks to stem their recent bleeding, outlooks from heavy-hitters such as Google Inc., Intel Corp. and International Business Machines Corp. will need to show the economy is rebounding after a weather-stilted first quarter.

Company forecasts for the second quarter will likely carry more weight than actual first-quarter earnings results this season. Most investors have already accepted that first-quarter earnings results will be unimpressive due to severe winter weather during the quarter, according to strategists.

"You can get a pass on the first quarter, but then the bar on the second quarter goes up," said Brad McMillan, chief investment officer for Commonwealth Financial. "It all keeps on coming down to growth expectations."

U.S. stocks got clobbered this past week. The S&P 500 Index (SPX) and the Nasdaq Composite Index (RIXF) both had their worst weeks since mid-2012, falling 2.7% and 3.1%, respectively. The Dow Jones Industrial Average (DJI) fell 2.4% for its worst week since mid-March.

That's just in time for a ramping up of earnings season. During the four-day trading week, which ends Thursday ahead of the Good Friday holiday, nine Dow components report quarterly results. Those Dow components include Coca-Cola Co. (KO), Johnson & Johnson Inc. (JNJ), and Intel (INTC) on Tuesday; IBM (IBM) and American Express Co. (AXP) on Wednesday; with UnitedHealth Group Inc. (UNH), General Electric Co. (GE), Goldman Sachs Group Inc. (GS), and DuPont (DD) on Thursday.

Also 52 S&P 500 components release results with significant reports filling out the tech and financial sectors. Companies include Google (GOOG)(GOOGL), Yahoo Inc. (YHOO), Bank of America Corp. (BAC), Citigroup Inc. (C), Morgan Stanley (MS), and BlackRock Inc. (BLK)

Financial results continue after Friday presented a diverging tale of two banks with J.P. Morgan Chase & Co. (JPM) shares falling on a miss and Wells Fargo & Co. (WFC) rising on an earnings beat.

Citigroup earnings: here's what investors can expect

Wall Street's outlook for the first quarter is pretty bleak. Then expectations get more optimistic. First-quarter earnings are expected to decline 1.6% from the year-ago period, down from forecasts of 4.3% growth in January, according to FactSet. Analysts expect earnings growth of 7.7%, 11%, and 11% for the second, third, and fourth quarters, respectively.

Projected declines, like the one expected for the most recent quarter, usually don't pan out, notes John Butters, senior earnings analyst at FactSet. Over the past 12 quarters, earnings have only declined once in the three other instances where they were forecast to decline, and have always fared better than expected, according to Butters.

Both Dan Greenhaus at BTIG and analysts at Goldman Sachs have forecast that first-quarter earnings are likely to grow more like 2%. In calculating the average "beat" on earnings over the past 12 quarters, Butters estimated earnings would likely grow 1.8% in the first quarter.

"Investors may be willing to look through poor 1Q results brought on by adverse weather conditions if managements offer evidence of improving business activity," said Goldman Sachs in a recent note.

"While guidance always skews negative, guidance provided in recent quarters has been more negative than usual," Goldman Sachs said. "Investors need to see a reversal of this trend in order to dismiss poor 1Q results."

Show me the outlook

The Dow may be 3.7% off its recent record high, and the S&P 500 4.3% off its high, and the Nasdaq 8.5% off its recent high, but those levels are still considered pricey by many investors if companies don't start backing up their results with solid growth and investment.

Manufacturing orders picked up in March, along with improved car sales and factory orders, and that puts more pressure on companies to spend more money on capital expenditures and growth. Bank of America Merrill Lynch's Savita Subramanian said in a recent note that "if companies signal they are spending on growth via capex and R&D or even M&A, rather than returning cash, that would bode well for corporate confidence and the overall health of the economy, and could lift stocks, as companies spending on growth have begun to outperform."

Big tech names reporting this week such as Google, IBM, and Intel are seen by Commonwealth's McMillan more as broad bellwethers for the economy, especially in the area of capital expenditures. These companies in particular should be benefitting from a rise in capital expenditure spending, so if their results are light, that could indicate a red flag for the economy, he said.

The main reason why Brian Belski, chief investment strategists at BMO Capital Markets, is still bullish on U.S. stocks long term is that corporations have gone too long without capital improvements, signalling a lot of pent-up spending. In a recent note, Belski said the average age of corporate equipment and software is at its most outdated levels in 15 years, and that while capital spending has improved recently, it's still well below historical averages compared with GDP.

Other earnings on deck

The most exposed sector this earnings season, however, will be consumer-based stocks, particularly consumer staples, Commonwealth's McMillan said.

In addition to Coca-Cola, consumer staples names reporting this week include PepsiCo Inc. (PEP) and Phillip Morris International Inc.(PM) , while consumer discretionary names include Mattel Inc.(MAT) , Chipotle Mexican Grill Inc.(CMG) , and AutoNation Inc. (AN)

Healthcare and medical earnings reports this week include Abbott Laboratories(ABT), St. Jude Medical Inc.(STJ), and Baxter International Inc. (BAX) .

Another heavily represented sector this week includes industrials with reports from Union Pacific Corp. (UNP), CSX Corp. (CSX), Kansas City Southern (KSU), Rockwell Collins Inc. (ROK), Honeywell International Inc.(HON) , Danaher Corp.(DHR), and Snap-on Inc. (SNA)

Expect weather to figure heavily in reports. Weather figured as a prominent reason for hurting earnings results in 12 out of the 26 S&P 500 companies that have already reported first-quarter results, according to FactSet's Butters. Also, 93 out of 111 S&P 500 companies, or 84%, have issued an earnings outlook that fell below the Wall Street consensus at the time, according to FactSet data.

More on MarketWatch:

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This stock market needs a correction

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