This week on Wall Street was another trip to the garbage dump: Dow Jones Industrial Average dropped 4.4% for the week on those worries. The S&P 500 fell 4.6%, and the Nasdaq Composite slid 4.5% over the five sessions. This coming week sounds like more of the same, but we'll be on the look out for some bargain shopping. But the big day will be Thursday when Ben Bernanke will testify before the Senate Banking Committee to answer questions about the U.S. economy and the state of the U.S. financial markets.
The Federal Reserve continues to be a focus, as this week saw a handful of Fed officials comment on the state of the U.S. economy. While some, such as San Francisco Fed President Janet Yellen, hinted at further rate cuts ahead, Atlanta Fed President Richard Fisher said the steps already taken are likely to mitigate downside risks to growth once they take full effect.
Reporting earnings this week:
General Motors (GM) is set to report on Tuesday, which should provide some insight into how the already-troubled U.S. auto industry is coping with a consumer spending pullback.
Another Dow component, Coca-Cola (KO ), will report earnings on Wednesday along with Vonage Holdings Corporation (NYSE: VG). Despite this one being one of the worst IPO's ever, Vonage still has a cult following behind it. Last quarter, the company added 78,000 net subscriber lines and ended with more than 2.5 million lines in service. Its average monthly churn was 3.0% last quarter.
Then there's Baidu.com, Inc. (NASDAQ: BIDU). The estimates from First Call for the Chinese internet search engine were $0.71 EPS on $76.83 million in revenues. Next quarter's revenue estimates are almost $77 million. Estimates for fiscal 2008 are $4.13 EPS on $432.35 million in revenues. Last quarter, the company gave guidance of $74.7 million to $76.7 million in revenues and EPS targets around the time were $0.70 EPS.
Abercrombie & Fitch (ANF) will be an early earnings reporter from the retail sector on Friday. Thomson reports that apparel retailers are expected to post a 4% increase in earnings for the fourth quarter, but department store chains are headed for a 17% drop, while general merchandisers are expected to dip 4%.
Here's what Forbes.com has to say about next week:
Stocks to watch next week include Yahoo (nasdaq: YHOO - news - people ), which gained 16 cents, or 0.6%, to $29.20 Friday, but was still trading well below the $31 a share Microsoft (nasdaq: MSFT - news - people ) offered on Feb. 1. Microsoft shares were also on the rise Friday, up 44 cents, or 1.6%, to $28.56, as reports surfaced that Yahoo's board was meeting to discuss the nearly $45 billion offer. (See: "The Yahoo Deal")
The financial sector will also be in focus, after an index of banks and brokers in the S&P 500 fell 8.9% this week as fears of corporate debt defaults rose as the cost of insuring that debt rose to record highs.
The bond insurers also bear watching Monday, after MBIA (nyse: MBI - news - people ) raised $1 billion in capital this week in what may ultimately wind up being a failed effort to shore up its AAA financial strength ratings. (See: "Washington To Bond Insurers: Don't Expect A Bailout").
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