Earnings Reports, Profit Forecasts Due

Earnings season begins in earnest in the coming week, and many investors will be poring over profit reports to gain a sense of whether last week’s record-setting run in stocks will continue.

Earnings, and perhaps more important, profit forecasts, will be at the front of investors’ minds as they try to glean whether the economy is slowing too quickly, as some fear, or whether the Federal Reserve’s course of rate hikes and pauses will allow growth to slow but continue.

Investors tossed aside many of their concerns about the state of the economy for much of last week and sent the widely followed Dow Jones industrial average to its highest trading and closing levels for several straight days, giving the Dow a 1.5% increase for the week.

This came despite a lower finish for the Dow on Friday triggered by a disappointing employment report.

Although the record setting was limited to the 30-stock blue-chip index, the Standard & Poor’s 500 index and Nasdaq composite index registered impressive gains as well, though they remain well off their highs.

Acquisitive investors will be eyeing their holdings to see whether they bet correctly in recent weeks as oil prices fell further from midsummer highs and as the notion took hold among some investors that the Fed could cut interest rates sooner rather than later.

To keep inflation in check, the central bank raised short-term interest rates 17 straight times over two years. before standing pat at its last two meetings.

Some saw a series of economic reports that showed a slowing economy as all the cover the Fed would need to justify cutting rates.

Although a slowdown could be good for those hoping for a rate cut, few stock market investors would want to see a falloff in profits.

Alcoa Inc., whose earnings report customarily marks the beginning of an earnings season, is scheduled to kick things off Tuesday.

Also on Tuesday, the Commerce Department is scheduled to issue its monthly report on business inventories. That could provide a closer look at the manufacturing sector, which has been shown to be weaker in various reports within the last month.

Wednesday brings the Fed’s meeting minutes as well as weekly data on crude oil inventories; a surprise increase pushed prices down and helped usher the Dow to its new highs last week.

On Thursday, the Fed plans to release its “beige book” report, which summarizes regional economic activity. Also that day, the Commerce Department will issue data on the country’s trade balance. Then, on Friday, the Commerce Department will report on retail sales.

From the Associated Press

The Week Ahead

Today

* Columbus Day. U.S. stock markets are open, but government bond and some commodities markets are closed.

* Nobel prize for economics is announced in Stockholm.

Tuesday

* Treasury bill auction.

* Quarterly earnings reports due from Genentech Inc. and Alcoa.

Wednesday

* Quarterly earnings reports due from Gannett Co., Media General Inc. and Monsanto Co.

Thursday

* Federal Reserve releases its “beige book,” a survey of regional economic conditions.

* Commerce Department reports on international trade for August.

* Labor Department reports on weekly jobless claims.

* Freddie Mac reports on mortgage rates.

* Quarterly earnings reports due from Safeway Inc., Costco Wholesale Corp., Domino’s Pizza Inc., PepsiCo Inc. and Winnebago Industries Inc.

Friday

* Commerce Department reports on retail sales for September and business inventories for August.

* Quarterly earnings report due from General Electric Co.