Stocks: Earnings and Fed action in play

Click the chart for more stock markets data

NEW YORK (CNNMoney) -- Earnings reports will be out in full swing this week, giving investors a lot of data to parse through. They'll also mine for clues of potential stimulus measures from the Federal Reserve.

So far, it has been a shaky start to earnings season, leaving investors worried about the global economic outlook. Of the 31 companies that have reported results for the second quarter thus far, 18 have beat expectations, six have missed and seven have matched.

Investors are expecting more bad news as more companies are set to report this week. Negative outlooks have come from 63 out of the 103 companies that have provided second quarter guidance.

While investors worry about the corporate slowdown, all eyes will shift to the Federal Reserve Board this week to see if the central bank finds there is enough of a slowdown in the economy to take further action.

Fed chairman Ben Bernanke will testify in front on Capitol Hill to present his semi-annual Monetary Policy Report on Tuesday and Wednesday. Investors will be listening for hints as to whether the bank will take further stimulus measures or announce a third round of quantitative easing.

Minutes from the Fed's last meeting in June released last week showed that some members would like the bank to consider "new tools to promote more accommodative financial conditions."

But members expressed concern that its efforts to boost the economy could lead to a "deterioration in the functioning of the Treasury securities market that could undermine the intended effects of the policy."

Comments from Federal Reserve Bank of Atlanta president Dennis Lockhart showing that he thinks stimulus action may be coming down the pike further fueled speculation last week.

Analysts aren't expecting any market-moving news out of Bernanke's testimony, but investors are clamoring for it.

"The testimony could set the market's tone for the rest of the summer," said Peter Cardillo, chief market economist at Rockwell Global Capital. "But I think Bernanke is going to say more of the same, that the economy has weakened and lost momentum, and that the Fed remains open for stimulus if necessary."

The International Monetary Fund will release its the world economic outlook on Monday. The IMF is expected to lower its outlook for global economic growth, which could intensify investor buzz as to whether the Fed will take action.

Investors will also digest a slew of U.S. economic reports this week. Retail sales and CPI are due out on Monday and Tuesday respectively, giving investors a glimpse of the state of the consumer. The employment picture will once again be in focus when weekly jobless claims come out Thursday.

Analysts anticipate continued signs of slow-moving growth.

"We'll see continued data that shows the economy is growing at a snail's pace," Cardillo said.

Europe will continue to be a worry for investors this week. Eurozone finance ministers will meet to hammer out plans to stop the bleeding in the debt crisis. They are expected to finalize last week's deal to provide an initial €30 billion bailout for Spain's troubled banks on Friday.

Investors are hopeful that these steps toward concrete measures will stabilize the euro region. However, the German Constitutional Court is expected to weigh in on the legality of the European Stability Mechanism, Europe's new permanent bailout fund, sometime next week. The court may not make a decision until October, however, which could put pressure on euro leaders to take more immediate action in the meantime.

In corporate news, the final four big banks will report earnings this week. JPMorgan Chase (JPM, Fortune 500) reported solid profits at the end of last week, and investors are hoping this trend will continue as Citigroup (C, Fortune 500), Goldman Sachs (GS, Fortune 500), Bank of America (BAC, Fortune 500), and Morgan Stanley's (MS, Fortune 500) numbers come out.

The first round of tech companies will also roll out this week. Intel (INTC, Fortune 500) will kick it off on Monday, followed by Google (GOOG, Fortune 500) and Microsoft (MSFT, Fortune 500) on Thursday.

Investors will look closely as an ailing Yahoo (YHOO, Fortune 500) reports on Tuesday. The company has been without a CEO since May, when Scott Thompson was ousted after just four months in the wake of a scandal over his embellished college degree. The company also announced that hackers had posted online what they say is login information for more than 450,000 Yahoo users earlier this month.

The week wraps up with General Electric (GE, Fortune 500), long considered a bellwether of the economy, reporting earnings on Friday.

Aside from corporate earnings, global banking giant HSBC (HBC) will face scrutiny on Capitol Hill on Tuesday over its allegedly lax protections against money laundering by organized criminals and terrorist groups. It's not clear if or how much HSBC may be fined over its alleged lapses, though the Financial Times speculated that the bank could be on the hook for up to $1 billion, citing analyst estimates.

U.S. markets were down much of last week due to underwhelming earnings reports and further worries over Europe. The week ended higher, however, as Friday snapped a 6-day losing streak with JPMorgan Chase's stronger-than-expected second-quarter earnings and regained hope that the Fed may take further action.

Stocks ended mixed for the week. The Dow Jones Industrial Average (INDU) rose 0.04% and the S&P 500 (SPX) added 0.16%, while the Nasdaq (COMP) fell 0.18%.