Wall St next week: Stocks to weather earnings

Stock investors may want to fasten their seatbelts for the week ahead, when a flurry of earnings and economic data will once again be in focus.

Concerns over the Iraq elections and the outcome of the next meeting of the Organization of Petroleum Exporting Countries, or OPEC, both scheduled for next Sunday, January 30, also could affect investor sentiment during the week.

On the earnings front, there's little evidence to build a case for optimism.

Of the first 117 companies in the Standard & Poor's 500 to report earnings, more have missed expectations on earnings and revenue than at the same time last year, according to Reuters Estimates.

And in the stock market, investors voted their dismay by being quick to sell after getting the earnings news.

For the year to date, the blue-chip Dow Jones industrial average is down 3.62 per cent, the broader S&P 500 is off 3.63 per cent, and the tech-heavy Nasdaq is down 6.49 per cent.

"I think next week is going to be very volatile," said David Scott, portfolio manager at the Chase Growth Fund, which has assets of more than $200 million, mostly in large-cap companies.

"Some companies will come through with nice earnings and guide positively -- others will not. It's a tough week to read."

The earnings season gets into top gear with dozens of the biggest US companies scheduled to report.

Those will include Johnson & Johnson, Merck & Co Inc and Merrill Lynch & Co Inc on Tuesday, Starbucks Corp on Wednesday, Microsoft Corp and Caterpillar Inc on Thursday, and McDonald's Corp on Friday.

On the week's calendar of economic data, the consumer confidence index for January from the Conference Board on Tuesday, durable goods data for December on Thursday, and fourth-quarter gross domestic product numbers on Friday will be closely watched.