updated 7/6/2008 1:21:00 PM ET 2008-07-06T17:21:00

Investors battered by surging energy prices, disappointing economic data and the ongoing credit crisis will this week have something else to worry about — second-quarter corporate results.

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The unofficial start to earnings season takes place Tuesday when aluminum producer Aloca Inc. posts results. General Electric Co. on Friday will also be among the companies reporting.

The pair of Dow Jones industrials could give Wall Street a glimpse of what to expect when hundreds of other companies post results throughout the month. Not only are investors concerned that companies can’t beat already lowered expectations, but they’ll also be focused, undoubtedly with some skepticism, on what corporate executives forecast for the second half of 2008.

“The earnings, which are a reflection of the economy in general, have been going down and unfortunately there’s a lot of concern it will go down a lot more,” said Howard Silverblatt, Standard & Poor’s senior index analyst. “How long can they continue through the storm? Nobody believes the ’worst is behind us’ comments from the CEOs because they can’t predict where this economy is going.”

Earnings from members of the S&P 500 are forecast to be down 10 percent for the second quarter. The nation’s banks and brokerages are likely to lead the pullback with another disappointing quarter.

Companies like Merrill Lynch & Co. and Citigroup Inc. are again expected to write off billions of dollars of assets rendered nearly worthless because of the global credit crisis. Since last year, banks have written down nearly $300 billion — and that is not expected to let up.

Financial stocks last year contributed $60.7 billion of earnings to the overall S&P, and this time around the number is expected at $24.6 billion, according to S&P. And, in a demonstration of how dominant financials are, Silverblatt said earnings for the S&P 500 would rise 9 percent during the second quarter if banks and brokers were stripped out of it.

Wall Street finished last week with another decline, with the Dow Jones industrials down 0.51 percent; the Standard & Poor’s 500 index down 1.21 percent; and the Nasdaq composite index down 3.01 percent. While that was a less steep drop compared to the week before, investors clearly are showing dissatisfaction with the economy — especially higher energy prices.

Investors are expected to remain anxious this week as crude oil approaches $150 a barrel. On Thursday, oil touched a trading high of nearly $146 before it settled at a record $145.29.

The approximately 50 percent jump in the price of oil this year has weighed on both businesses and consumers and posed a challenge to Federal Reserve policymakers who are trying to keep the economy out of a prolonged downturn.

Low interest rates have weakened the dollar, which has in turn made oil more expensive. Now, with consumers forced to pay more at the gas pump, Wall Street is worried about a broad slowdown in spending — a serious blow to the economy as consumer spending accounts for more than two-thirds of U.S. economic activity.

Investors will be looking to a light flow of economic data next week for insights into how surging energy costs are affecting the economy.

On Tuesday, the National Association of Realtors reports on pending sales of existing homes. The May index is expected to come in at 87.0, according to the median estimate of economists surveyed last Wednesday by Thomson Financial/IFR. That would be down from a reading of 88.2 in April.

On Thursday, the Labor Department releases its weekly reading on unemployment claims. Economists anticipate a slight rise of 1,000 to 385,000.

On Friday, the University of Michigan releases its preliminary reading on July consumer sentiment. Economists expect the index to slide to 56.0 from 56.4 in June.

Also Friday, the Commerce Department reports on the U.S. trade deficit. After increasing to $60.9 billion in April, the trade gap is expected to have widened again in May to $62.3 billion.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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