NEW YORK (CNNMoney.com) - Is that it for the rout? Or has it only just begun?

Negative earnings surprises last week that ranged from disappointing to disturbing put an abrupt end to the 2006 market rally...and they raised concerns about what could come this week. Key earnings reports are expected from several large companies, including American Express, Texas Instruments and Microsoft.

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In addition, crude oil on Friday jumped $1.52, or over 2 percent, to $68.35 a barrel as tensions mounted over Iran's nuclear ambitions. Crude prices have jumped more than 8 percent this year, bringing them within striking distance of the record $70.85 hit Aug. 30 after Hurricane Katrina struck.

Weak results last week came from Intel, while Citigroup, General Electric, IBM and Yahoo reported fair results that were slightly below forecasts. Motorola, Apple and Yahoo! issued disappointing forecasts.

So far, the response from investors has been swift and severe. Following intense selling Friday afternoon, the Dow and the Nasdaq finished the week down nearly 3 percent. The losses put the Dow into negative territory for the first time in 2006.

Jim Melcher, who runs a hedge fund from his investment firm Balestra Capital in New York, thinks the weak reports are an early sign that earnings growth is due for a decline. "Earnings have been really quite good for three years, but that's pretty much over," he said.

Melcher thinks the weak earnings results are the effect of a slowdown in consumer spending that started in earnest a couple of months ago and is just now starting to play out in the economy. Melcher cites a number of factors that point to continued weakness.

"Short-term rates have moved up to highest level since they started, energy prices have moved up, and the American consumer has done all the borrowing he can do -- the house is no longer the cash machine it once was," said Melcher, who has been long energy for three years and is currently shorting home builders and mortgage lenders.

Melcher added that actual wages, adjusted for inflation, have risen only very modestly in the past five years, adding to a consumer-spending slowdown.

Kevin Landis, president and CEO of San Jose, Calif.-based Firsthand Capital Management, said he thinks that the negative reaction obscures the fact that some of the earnings reports were actually quite good.

"It's not as bad as one might infer, it's just not as good as people's hopes were," Landis said. "Even the companies who are doing the worst haven't blown up too badly, and others came out and said 'Let's not get too carried away,'" he said of the companies who issued lower-than-anticipated forecasts.

Alec Young, equity-market strategist in the equity research division of Standard & Poor's, said it is too early to call the entire earnings season a bust. Nonetheless, Young said S&P's forecast for 13 percent earnings growth for the fourth quarter may have to come down once more data become available.

In addition, Young thinks this week's earnings news has put a lid on the market. "We can forget about [the market] going up -- the question is will (next week's) news send the market down," he said. "It's too early to write off the quarter and extrapolate that broad based earnings are going to be weak. But it is a concern, and we do feel it's thrown enough of a curve ball at investors that the recent gains we'd seen are over."

Michael Church, portfolio manager at Yardley, Penn.-based Church Capital Management, said that while Friday's losses were "not pretty," he doesn't think this week's results will necessarily translate into poor showings next week. Church said he'll be paying particularly close attention to Texas Instruments and Microsoft, both of which he owns shares in.

"Obviously, those are going to be crucial," he said. "If both of them were to slip up, I'd certainly hope (the markets won't react) as badly as they did today. But I think TI will see some strength." He also expects strong results from Corning, which reports on Tuesday.

Monday: American Express (Research), Ford (Research), Texas Instruments (Research)

Tuesday: 3M (Research), DuPont (Research), Johnson & Johnson (Research), Lucent (Research), McDonald's (Research)

Thursday: Microsoft (Research), Verizon (Research)

Monday: Leading economic indicators

Wednesday: Existing-home sales

Thursday: Durable goods orders

Friday: Gross domestic product (GDP), new-home sales

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