U.S. Stocks Expected to Have Volatile Week

U.S. stocks look set to stay locked in a volatile mode this week as investors keep a wary eye on security threats around the world and scan corporate announcements for hints on first-quarter profits.

On the anniversary of the U.S.-led assault on Iraq, the mood on Wall Street turned fretful once again, after the recent bombings in Madrid.

Each of the main indexes ended a choppy week on the downside, as stocks retreated further from longtime highs set in the previous two months.

“There will be a lot more volatility, in return, due to geopolitical risks,” said Sandy Lincoln, chief executive of fund firm Wayne Hummer Investments in Chicago.

However, Lincoln added, first-quarter profits could be surprisingly strong and that could renew investors’ hunger for stocks.

“I think investors are going to be phenomenally surprised on the upside,” said Lincoln, predicting hefty profit increases as companies make the most of cost savings and productivity gains. “A lot of companies have really carved to the bone on expenses -- it should provide explosive earnings growth.”

Companies reporting this week include drugstore chain Walgreen Co. today and ConAgra Inc. on Thursday.

Economic data will be led off by February durable goods orders, due Wednesday.

Economists polled by Reuters expected a 1.7% increase in February’s overall orders for durable goods, which include washing machines, computers, cars and other items intended to last three years or more -- as consumers’ appetite for spending continues.

On Thursday, the government releases final fourth-quarter GDP figures. The GDP forecast calls for an annualized growth rate of 4.1%.

At the same time, economists expect to see weekly initial jobless claims dip slightly to 335,000. Those numbers are also out on Thursday.

On Friday, the University of Michigan publishes its final consumer sentiment survey for March.

The survey is expected to show a slight dip to 93.7 from the previous reading of 94.4.