NEW YORK (CNN/Money) - So, is the market merely suffering through a little indigestion, or is it coming down with the stomach flu?

Traders are hoping for the former. After bumping higher through the first couple of weeks of the month, stocks stumbled badly in the past week as investors sorted through a boatload of earnings reports and fretted over what's going to happen with Iraq.

With the markets closed Monday for Martin Luther King Day, Wall Streeters should be refreshed when they get back to their desks in the week ahead. Alas, being refreshed may not mean that they're any less confused. (For a line up of key events in the week ahead, click here.)

The earnings so far have been a lot better than you might think. Notwithstanding the shaky market, the 95 companies in the S&P 500 that have reported so far have, on average, reported fourth-quarter earnings that are 9.8 percent higher than last year and 3.7 percent better than analysts expected, according to First Call. Part of the problem is that some companies -- notably Microsoft -- said their outlooks weren't as bright as previously thought. Another part may have been that, in rallying stocks through the early part of January, investors already expected good news on the profits front. Yet another case of sell the news.

But maybe if the earnings keep on coming in well, the market can get back to its winning ways.

"The earnings could be huge," said Aeltus strategist Jim Griffin. "You have to believe that with all the efforts to get costs down we could be seeing a lot of positive surprises."

But Griffin worries that even if the earnings news is good, the coming week could be a struggle. The economic calendar is remarkably light, and that may shift much of the market's focus to the following week, when chief U.N. weapons inspector Hans Blix is due to report his team's findings and, shortly thereafter, President Bush delivers his State of the Union address. Even if there is no breaking news on Iraq in the week ahead (and there almost certainly will be), rumors of war could drive the market.

If there is a consensus view among traders, it is still that any action against Iraq would likely be short, but fear of the unknown would drive the market down in its early stages. That dip would constitute a lovely buying opportunity.

"If an Iraq war scenario were to unfold in the early part of the year, it would probably be welcomed by the market," said J.P. Morgan equity strategist Carlos Asilis. "Especially once victory is attained, which I think it would."

But Asilis thinks that the euphoria could be short-lived. The market's real problem is not Iraq, he thinks, but that it is still too expensive. Nor does he believe that resolving the war fears would truly be a salve for the ailing U.S. economy. The labor market will still be weak, balance sheets will still be in need of repair and the hangover effects of the busted investment bubble will still be there.

"There's a lot of hope and a lot of wishful thinking from who believe the concerns of consumers and business executives have everything to do with Iraq," he said. "I don't buy that story."

• Monday U.S. markets are closed in observance of Martin Luther King Day.
• The pace of earnings will be heavy in the week ahead. For a look at some of the company results that will matter most, click here.
• Tuesday morning investors will get a look at December housing starts and building permits. Economists surveyed by Briefing.com expect both to be moderated, with starts dropping to an annualized 1.693 million from November's 1.697 million, and permits dropping to an annualized 1.7 million from the previous 1.738 million. But the expected drop likely has more to do with harsh weather than weakness in the still-robust housing market.
• Thursday the Conference Board issues its index of Leading Economic Indicators for December. Economists don't pay too much attention to this one -- it's comprised of data that they've already seen -- but it gives a concise read on the economy and its movements sometimes move the market. Economists think it was flat compared with a gain of 0.7 percent in November.