|By DANIEL WAGNER, AP Business Writer|
With fourth-quarter earnings season hitting its stride, investors are returning to the familiar comfort of cold, hard numbers _ the press releases, conference calls and spreadsheets that provide a real view of corporate America's performance.
Trading has been dominated for months by speculation about news events:
"A lot of people like to trade around earnings because there are a lot of short-term opportunities there," says
This week will bring answers to questions that have hung over the market for months: Will slower growth in
Here's a guide to some of the big stories that professional investors will be watching as the earnings news arrives:
The messages so far are mixed. When
Announcing its fiscal second-quarter results last month, however,
"You've got to look at what these companies are seeing in Asian markets," says
_ HOUSING RALLY: HOW LONG? The government said Thursday that U.S. builders started work on homes in December at the fastest pace in 4 1/2 years, and that last year was the best year for residential construction since the early stages of the housing crisis.
It was the latest announcement to lift homebuilder stocks, which have been rising as evidence mounts that the housing market has finally regained some momentum. Homebuilders in the Standard & Poor's 500 index have shot up 23 percent since their recent low on
Yet some have been reluctant to trust the turnaround. In an earnings call with analysts last week,
This week brings more data on sales of new and existing homes in December. If the numbers look weak, analysts say, homebuilder stocks may appear overbid and the rally may pause until earnings results arrive from big players like
_ HOW SUPER,
This quarter's earnings will give traders their first look at how hard Sandy hit the major property and casualty insurance companies. Analysts have been reducing their expectations for the financial industry's performance mainly because of insurers, Butters said.
Reporting on Friday, auto insurer
_ TECH TROUBLE: Tech companies have been vocal about the challenges they face. Of the 32 tech companies that gave earlier guidance about their fourth-quarter performance, more than 90 percent were negative, Butters says. The usual number is closer to 50 percent, he said.
One troubling sign Thursday was
The tech portion of the
For Apple, it will be "a pivotal quarter," says
"It will be interesting to see if the fundamentals of Apple still stack up," he says.
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