NEW YORK (CNNMoney.com) -- The quarterly reporting period kicks into full swing this week, with 122 of the largest companies due to report, giving investors more clarity on how corporate America - and the consumer -- are faring amid the economic slowdown.
"So far, so good on the earnings front, but some of the revenue results have been mixed," said John Butters, senior research analyst at earnings tracker Thomson Reuters. "This week we get into the meat of the reporting period."
Disappointing revenue results from Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500) and General Electric (GE, Fortune 500) dragged on stocks at the end of last week, overshadowing better results earlier in the week from Alcoa (AA, Fortune 500) and Intel (INTC, Fortune 500).
But investors were also unnerved by reports suggesting a deflationary environment, sluggish consumer spending and weak sentiment. The University of Michigan's July consumer sentiment index Friday fell to the lowest point in almost a year, reflecting investor worries about the economic slowdown.
"The challenge going forward is the trading range we're in and the uncertainty about the domestic economy and the consumer," said Timothy Ghriskey, chief investment officer at Solaris Asset Management.
"We're seeing signs that corporations keep recovering but there's fear that we could roll back into recession again," he said. "While that's a long way away, if the consumer keeps weakening, it could become a self-fulfilling prophecy."
Quarterly results: This week brings results from nearly one-quarter of the S&P 500, including 12 Dow components. IBM (IBM, Fortune 500), Microsoft (MSFT, Fortune 500), AT&T (T, Fortune 500), Coca-Cola (KO, Fortune 500) and American Express (AXP, Fortune 500) are among the standouts on the Dow.
S&P 500 earnings are currently on track to rise 28% in the second quarter, while revenue is on track to rise 9%, according to the latest figures from Thomson Reuters. Full-year earnings are still expected to rise around 34%.
So far, about 75% of companies have beaten results on an earnings basis and 71% on a revenue basis. But with just 10% of the S&P 500 having reported results, the sample number is too small to draw any meaningful conclusions, said Thomson Reuters analyst Butters.
"The percentage is unusually higher versus the long-term average of about 62% of companies beating forecasts, but its pretty consistent with the last four quarters," he said.
The materials sector is expected to post the best year-over-year growth, with a forecast gain of 90%. Energy is second best, with expected growth of 74% versus a year ago. Tech is third and is expected to see growth of 59% year-over-year.
On the downside, the utilities sector is forecast to see profits fall 5% from a year ago. It is the only one of the ten economic sectors expected to see a decline from a year ago.
Economy: In addition to the profit reports, this week brings a spate of housing market reports. Standouts include June housing starts and building permits from the government, due Tuesday; and the existing home sales index for June from the National Association of Realtors, due Thursday.
Building permits, a measure of builder confidence, are expected to inch up to a seasonally-adjusted annual rate of 575,000 in June from a 574,000 rate in the previous month, according to a consensus of economists surveyed by Briefing.com. But housing starts are expected to have dropped to a seasonally-adjusted annual rate of 570,000 units from 593,000 in May.
Existing home sales are expected to have fallen to a rate of 5.04 million units in June from a rate of 5.66 million units in May.
In Washington, the Senate Banking Committee holds a hearing on monetary policy Wednesday with Federal Reserve Chairman Ben Bernanke due to testify. Also, President Obama is expected to sign the Financial reform bill into law sometime during the week.
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