Stocks are poised to rise this week as investors look past the flood of expected earnings reports and see a potential rebound in the economy and corporate profits.
Wall Street is already forecasting the worst period for earnings in a decade. But with the trickle of earnings reported so far mostly in line with expectations, investors do not expect more bad news. Any positive surprises would be favorably received.
The market "will continue to be dictated by earnings numbers," said Mr Owen Fitzpatrick, head of US equities at Deutsche Bank Private Banking.
"Earnings are so far, so good - companies reporting this week like General Electric [GE] have given the market some confidence. If that pace continues, the market will trade higher and that is exactly what investors are looking for," he said.
GE, the world's largest company in terms of market value, bolstered investors' optimism last Thursday when its earnings met Wall Street's expectations.
The good earnings news from GE and other companies inspired a rally, especially in technology stocks, that drove both the tech-laced Nasdaq Composite Index and the broad Standard & Poor's 500 Index back up to end above their closes the day before the attacks on the US.
This week, the busiest for third-quarter earnings reports, will see 180 of the S&P 500 companies post results, including such blue-chip names as Citigroup, JP Morgan, Johnson & Johnson, General Motors, Boeing and Coca-Cola.
Blue-chip technology companies set to report results this week include Intel, IBM, and Microsoft.
