NEW YORK (CNN/Money) - With all the enthusiasm on Wall Street lately, many observers have decided that the stock market is set for a fall.

Scanning the horizon, they've hit upon second-quarter earnings season as the thing that's going to kick off the selling. How could company results possibly live up to investors' sunny expectations?

Quite easily, thinks Puglisi & Co. director of research Joseph Kalinowski.

"We're going to see earnings come in much stronger than expected," he said. "I think they're going to confirm the rally and could even be enough to propel the market higher."

The reason for this cheer?

First, relatively few companies issued warnings on the second quarter -- often a sign that earnings are going to come in well. Second, analysts haven't been trimming their estimates as rapidly as in the past. So while estimates call for S&P 500 companies to show earnings growth of 5 percent in the second quarter, Kalinowski reckons its going to be more like 8 or 9 percent.

Nor does Kalinowski think that companies are going to be laying much crepe about the just-started third quarter. There, too, earnings estimates have held surprisingly steady. Same with the fourth quarter. Bears will hate to hear it, but it looks like we could see double-digit earnings growth in 2003.

Companies in this report: Citigroup; J.P. Morgan; Intel; Ford;General Motors; IBM; Coca-Cola; Microsoft.

As is true with a number of names in the sector, the nation's two biggest banks are both expected to show improved profits in the second quarter, and that's even with the pressures of a weak economy and low interest rates.

Interest rates at 45-year lows have made it harder for banks to make money off lending, but the upside is that low rates have added to the refinancing boom already in motion -- helping the mortgage side of banks' business, and boosting their bond underwriting and trading profits. The four-month-and-counting stock rally is also likely to have increased fee profits on the investment side of the firms' business.

While a continued rally in stocks would keep fee profits strong, the refi mania is not going to last forever, and lately the banks have perhaps been overly dependent on it, setting up the need now to find something to replace that segment of their profits.

In addition, the banks are vulnerable to an exhaustion on the part of the consumer. Citigroup, in particular, has extensive credit card exposure and could suffer should the unemployment picture continue to deteriorate. J.P. Morgan has exposure in terms of auto lending and could suffer for the same reasons.

As for other individual challenges, Citigroup has indicated it remains interested in potentially buying smaller rivals that could help it beef up parts of its business. While these deals might help in the long run, for the short term they would bring a variety of acquisition-related costs. Earlier in the week, State Street was mentioned as a potential Citigroup target.

Investors will also be looking to the firms as harbingers for the sector, as both banks have been embroiled in some of the conflict-of-interest scandals that have rocked Wall Street in recent years.

Why they matter: Solid earnings from the two banks would help investors feel more confident about the much-hoped-for economic recovery as strength in the financial sector is often seen as being linked with strength in the economy. This in turn might help amp up enthusiasm for the market.

As major lenders to businesses and investors, should these banks fail in any way, it could have a detrimental effect on the economy.

Citigroup First Call forecast: 80 cents per share versus 75 cents a year ago.

J.P. Morgan First Call forecast: 62 cents versus a 58 cents a year ago.

You can't say Intel is breathing steadily, but at least it isn't sucking wind anymore.

After three lean years, the company, whose microprocessors lie at the heart of most of the world's personal computers, is expected to show a 5.6 percent increase in sales for the second quarter from the year-ago period. It will be just the second time since 2000 that Intel has posted revenue growth.

The source of the improvement? Much of it is because many companies that put off upgrading PCs put in place ahead of Y2K decided they couldn't delay any further. But increasingly it appears that something more than a typical replacement cycle may be going on, and that companies are laying out money on proven technology because they've found its one of the best ways for them to boost productivity.

That could be a big positive not just for Intel and the tech sector, but for the economy at large. If companies are willing to lay out money for tech, maybe they'll be willing to spend money on other thing soon -- like hiring back workers.

Why it matters: You want to know where the PC sector is headed, there's no better place to look than Intel. If its business continues to improve, it will be an indication that the long-awaited tech comeback has finally arrived.

First Call forecast: 13 cents a share versus 9 cents a year ago.

General Motors Corp. and Ford Motor Co., the world's two largest automakers, are facing declining demand for cars and ever-growing price wars.

And while they are competing with each other, Japan's big automakers are also on the prowl – their collective share of the North American market continues to grow, and Honda, among others, keeps selling cars, even without huge incentives.

After gaining market share last year, GM has given some back, suggesting that earlier incentives stole some sales from this year. Ford has stemmed its recent market share losses but has struggled to make money on its core auto business, depending on units such as Hertz and Ford Credit to keep it in the black.

Both companies have struggled with huge pension plan shortfalls due to the three-year bear market and low interest rates. GM recently borrowed $17.6 billion by selling bonds to help shore up its pension funds. Analysts will be watching for the latest details on the pension plans in both companies' results.

GM has already warned it will have trouble meeting its profit target this year though it's keeping its mid-decade goal of $10 a share annual profit. Analysts are awaiting further guidance from both companies, as well as third- and fourth-quarter production updates.

Why they matter: With both companies struggling to hang on to market share, profit improvement depends on their cost cutting efforts. Better-than-expected results could give confidence that both are in a better position to weather tough times. Disappointing results could raise fears of further bottom line erosion.

Projections for stronger second-half car sales depend on increased business spending and improving consumer confidence. If automakers signal cutbacks in production or sales plans, it could indicate rougher economic times ahead.

Ford First Call forecast: 18 cents a share versus 31 cents a year ago.

GM First Call forecast: $1.19 a share versus $2.53 a year ago.

It's big. It's blue. And its stock hasn't done a thing for investors lately.

Yes, the big rally in tech has passed IBM by. Where the Nasdaq has run 29 percent since the end of October, IBM has advanced only a bit more than 6 percent -- less, even, than the Dow.

But if a turnaround in the economy is really at hand, it's hard to imagine that the company will remain such a laggard -- especially since it's been steadily shifting its business away from the computer hardware that defined it in the past toward faster-growing software and services. As the use of technology broadens, so too does the appeal among the world's big companies for a one-stop shop for technology solutions. Or at least that's the vision.

Why it matters: One of the challenges of technology companies is that they have to constantly reinvent themselves if they're going remain relevant for more than a cycle or two. To do that, they have to bet their money on the right horse. How IBM's bet pays off is going to define tech's future.

First Call forecast: 98 cents a share versus 89 cents a year ago.

Its Japan division, which makes for more than 15 percent of its total profit, has seen declining case volume lately -- everybody has to drink, but Japanese consumers may have decided that doesn't mean they have to drink Coke products.

Potentially more worrisome, Coke's second-quarter carbonated soft drink volume in the United States wasn't as strong as analysts expected. Some of that was surely due to the lousy weather that prevailed across the country through much of the spring, but the worry is that there may be something else going on -- that increasingly health-conscious U.S. consumers are shying away from the various types of bubbly sugar water that are Coke's lifeblood.

Coke has tried to meet this challenge by jumping onto the bottled-water wagon with three brands -- Dannon, Dasani, and Evian -- aimed at different price points. But it's just water, right? Hardly a market with significant barriers to entry.

Why it matters: Part of the lore at Coke headquarters is that no market is ever saturated -- an idea that has taken hold at major consumer products companies around the world. But the world's best-known brand may be on the brink of finding out that the myth that drives it is just a myth, and that even in an era of globalization, growth has its limits.

First Call forecast: 54 cents a share versus 49 cents a year ago.

Until recently, Microsoft was one of the year's duller stocks, making little ground as the rest of the market surged. That's all changed.

First, Merrill Lynch boosted its rating to a 'buy' from 'hold' and added Microsoft to its focus list -- a move that appeared to convince some investors the company's prospects aren't all that stodgy and set off a flurry of activity in its stock.

Next came a news report that Microsoft is considering paying a special dividend of more than $10 billion. And then there was the company's decision Wednesday to stop giving stock options to its employees and grant them restricted stock instead.

An exciting month so far, giving investors lots to chew on. But it's important not to stray from the broader question: What's Microsoft going to do next? The company's business is still heavily dependent on the sales of its operating systems, and its attempts to diversify have mostly fallen flat. That the idea of Microsoft letting go of such a large portion of its cash hoard is taken so seriously shows how hard it has been for the company to put its money to better uses.

Why it matters: The most highly valued company in the market has been distancing itself from the rest of tech crowd lately.

Silicon Valley-types fight tooth-and-nail to keep employee options from being treated as an expense; Microsoft does away with them. Tech titans argue that they shouldn't pay dividends because they have better things to do with their cash; Microsoft again may disagree. Are these signs of maturity at Microsoft, or instead that its time as an industry leader has passed?

First Call forecast: 24 cents a share versus 21 cents a year ago.