updated 7/17/2005 4:09:16 PM ET 2005-07-17T20:09:16

Companies are more productive and more people have jobs. Corporate earnings growth is strong. And while oil prices remain near historic highs, the economy is showing great resilience. Even inflation is a non-issue.

Major Market Indices

But don't expect a huge surge in stocks.

Last week's good economic and earnings news came at the tail end of an impressive, weeklong rally. And that's the last place you want to see it. Had the economic reports come out the previous week, when the indexes were 3 percent lower, Wall Street might have seen more of a jump.

The past week's rally was already looking tired by Thursday, when the Labor Department surprised the market with a very benign inflation report. And with the bulk of earnings seasons still to come, another hurricane threatening oil producing and refining in the Gulf of Mexico, and the Federal Reserve meeting in just over three weeks, there are more opportunities for the market to sell off than there are for a sustained push higher.

Stocks posted their third straight week of gains last week, thanks to the confluence of earnings, economic data and lower oil prices. For the week, the Dow Jones industrial average rose 1.83 percent, the Standard & Poor's 500 index added 1.33 percent and the Nasdaq composite index gained 2.08 percent.

Economic data
When there's little economic news, investors can have a hard time coming up with the confidence needed to buy stock. The week ahead carries few reports likely to move the markets, which means investors will have to rely on earnings to extend last week's rally.

On Tuesday, the Commerce Department will release its latest data on housing construction and building permit issuance. Economists are expecting a slight increase in housing starts, up modestly from an annualized rate of 2.06 million in May. The number of permits issued in June is likewise expected to see a slight climb.

With investors eyeing the housing market carefully and fearing a collapse of the pricing bubble in some markets, housing stocks could be affected by this report.

The bulk of earnings reports will be released over the next two weeks. Sixteen of the 30 Dow industrials are reporting this week, including Microsoft Corp., Citigroup, Altria Group Inc. and Pfizer Inc. Two Dow components, however, will likely garner intense scrutiny.

Shares of General Motors Corp. have climbed steadily since hitting a 52-week low of $24.67 on April 19. GM rose 48.9 percent since then, closing Friday at $36.74. After being hurt by sluggish sales and financial troubles, the automaker has been successful in driving business by extending its employee discount program to all car buyers. When GM reports earnings Wednesday morning, the company is expected to turn a profit of 10 cents per share, compared to 16 cents per share in the second quarter of 2004.

Intel Corp.'s earnings will likely set the tone for a resurgent technology sector that has pushed the Nasdaq to its highest levels of the year. Intel is expected to earn 32 cents per share, compared to 27 cents a year ago, when it reports earnings Tuesday after the session. The stock closed Friday at $28.30 after reaching a new 52-week high of $28.33 earlier in the session. Intel has climbed 44.1 percent from its 52-week low of $19.64 on Sept. 28, 2004.

The Federal Reserve will release the minutes of its late June meeting on Thursday — giving insight into the Fed's decision-making process on interest rates. The release of the minutes has moved the market significantly in the past, and investors will be reviewing the minutes carefully in hopes of finding clues as to when the Fed will pause in its policy of gradual, steady rate hikes. The release is due out at 2 p.m. EDT — enough to roil the markets in the last two hours of trading.

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