NEW YORK (CNN/Money) - With the end of the second quarter, it is time again for companies that have sinned in the eyes of Wall Street to kneel at their pews and confess their sins.

They have not earned enough, or hit their sales targets, and they truly and humbly repent for that -- even though it was really the fault of the economy, or SARS, or the weather. Yes, once again it's warnings season, that dreary time of penitence that tends to hit the market at the end of every quarter. Already, a few big companies have issued warnings, most notably Motorola and Texas Instruments. In the weeks ahead, there will be more. (For a lineup of key events in the coming week, click here.) All of which could give investors who are leery of how far the market has come over the past few months a nice excuse to sell.

"After the kind of run we've had, the market is entitled to rest and recuperation," said Stanley Nabi, managing director of Credit Suisse Asset Management. "When you have a rally of this nature, you tend to give back 20-to-30 percent of it. Then you're back in the saddle."

Such a move would bring the Dow back down to somewhere between 8,900 and 8,700 from its current 9,100.

The truth, however, is that earnings season, once it finally comes, looks like it will be good, thinks Puglisi & Co. chief market strategist Ozan Akcin. He points out that although, as usual, far more companies have warned on second-quarter results than have said they'd top analyst expectations, the ratio between the two has been narrower than usual.

"That implies that growth is going to be pretty good for the second quarter," said Akcin. He reckons that earnings for S&P 500 companies could come in 6-to-7 percent above year-ago levels compared with analysts' current expectations for a 4.5 percent gain.

Earnings growth through the year, and next year as well, could be quite good, thinks Nabi. The huge amount of money that's getting pumped into the economy through the Fed's easy policy and the recently passed tax cut, along with currency effects from the weaker dollar, could mean that earnings grow by 12-to-13 percent over the year. A return to economic growth in 2004, meantime, will lead to margin expansion, giving another year of 12-to-13 percent growth. By the time it's all over, earnings could be back up to their peak levels of 2000.

Keep all this in mind if over the next couple of weeks the market heads south on some big company's warning.

Most economists share Nabi's belief that the economy will be in better shape by the end of the year. With yet another wave of mortgage refinancings, tax rebate checks set to be sent out in a month, and interest rates of all sorts at levels that would have seemed unimaginably low just a year ago, gross domestic product could be growing by 3.5 percent by year's end.

Already, signs of a turnaround are beginning to manifest themselves, said Bank One chief economist Diane Swonk. Movie receipts in May, for example, were up 40 percent from a year ago. Retail sales have looked decent, despite the cold weather -- in its latest weekly sales report, Wal-Mart cited soup and hot chocolate sales for helping it keep on track.

"When has that ever happened?" asked Swonk. "The lousy spring should be hurting retailers, not helping them."

• The Empire State Index of manufacturing in New York is due out Monday. Gaining popularity, the index is believed to give a good read on manufacturing nationwide. In May it came in at 10.6. Any reading above zero would indicate continuing expansion in the state's manufacturing economy.
• The key read on inflation at the consumer level for May, the consumer price index, comes out Tuesday. Economists surveyed by Briefing.com expect the CPI dropped another 0.1 percent after falling 0.3 percent in April. The report could spark more chatter about the possibility of deflation hitting the United States.
• Economists think May housing starts, due out Tuesday, jumped to an annualized 1.7 million from April's 1.63 million. Building permits, on the other hand, are believed to have slipped to 1.715 million from 1.724 million.
• May industrial production, out Tuesday, is believed to have picked up by 0.1 percent after dropping by 0.5 percent in April. Economists forecast capacity utilization stayed pat at 74.4 percent.
• The Philadelphia Fed's index of manufacturing in its region is expected to come in at 5 after posting a negative 4.8 in May. Like the Empire Index, any number over zero indicates expansion.