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Week Ahead: Can The Markets Reach Fresh Yearly Highs On Positive Earnings?

 April 30, 2012 11:16 AM

The stock markets closed the week on a strong footing thanks to robust earnings from big companies lifting investors' sentiments. The market shrugged off some of the weaker than estimated economic data, including the U.S. GDP. Therefore, the next on investors' agenda is whether the markets test the earlier 52-week highs and reach beyond in the coming week.

The week ahead is filled with big companies lining up to announce their March quarter earnings results. Among them General Motors (NYSE: GM), Pfizer (NYSE: PFE), Kraft Foods (NYSE: KFT) and Broadcom (Nasdaq: BRCM).

[Related -Google Inc (GOOG): Why Nest Labs Deal Is A Wakeup Call For Apple Inc.?]

General Motors' results will come on the heels of higher than estimated results from Ford (NYSE: F), and Pfizer's results will indicate the first full quarter impact of cholesterol drug Lipitor after going generic.

On the economic front, personal income, consumer spending, auto sales, initial claims of jobs, nonfarm payrolls, ISM Manufacturing and employment data could provide direction for markets.

So far, positive earnings have reversed the stock markets' trend in the second half of April. The first half of April struggled to hold on to the first quarter's gains. In fact, the Dow Jones Industrial Averages (DJIA) nearly wiped out the first two weeks of April losses but has gained a modest 0.12 percent with today still remaining. The S&P 500 and Nasdaq have narrowed their losses to 0.36 percent and 0.72 percent respectively in April.

[Related -Apple Inc. (NASDAQ:AAPL): Why Gross Margins Will Expand In 2014 and Beyond?]

More than 280 companies from the S&P 500 list have reported their quarterly earnings number. Significantly, more than  70 percent have earned a profit that was higher than analysts' predictions. The results come amidst some mixed economic data that included favorable consumer sentiment in April, below expected GDP, and not so impressive durable goods results.

If technology bellwether Apple (Nasdaq: AAPL) were responsible for dragging the Nasdaq down in the week ended April 20, then its quarterly numbers are responsible for completely reversing the trend last week.

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