European markets are called to open negative this morning.
Asian stocks fell, led by banks and exporters, as the failure by U.S. lawmakers to reach an agreement to raise the federal debt limit increased the prospect of a default that may threaten the global recovery, and as Greece’s credit rating was cut by Moody’s Investors Service.
The debt ceiling clock is ticking and politics is strangling policy in Washington. At stake: The creditworthiness of the United States.
Meanwhile, the end of the week will bring an important report on the economy: The first official reading on growth in the second quarter — a period when the recovery lost steam.
Earnings season has been solid so far. Of the 143 members of the S&P that have reported results, 75% have beaten analysts’ expectations, according to data provided by Thomson Reuters.
“Corporate America is doing very well, and earnings continue to grow and companies are continuing to increase their guidance,” said Kate Warne, investment strategist with Edward Jones. “It’ a great indication for stock prices going forward.”
While earnings remain strong, investors’ attention has been elsewhere — particularly on the U.S. debt crisis.
Events this week
Monday: After the market close, investors will get results from chip maker Texas Instruments and video rental company Netflix. The results from Netflix will be closely watched, in part due to the massive run Netflix shares have had this year — up nearly 60%.
Analysts expect that Netflix will post a profit of $1.11 a share, while Texas Instruments is expected to earn 53 cents per share.
There is no economic data scheduled for release on Monday.
Europe’ big debt deal leaves plenty of room for worry
Tuesday: Investors will have a busy day on Tuesday, with companies such as 3M, Ford, US Steel and First Solar reporting results.
Shipping giant UPS, which is typically considered an economic bellwether, also reports before the bell on Tuesday. The company is expected to post a profit of $1.04 per share.
The S&P Case-Shiller home price index is scheduled for release at 9 a.m. ET. The Conference Board’ July consumer confidence report and the Commerce Department’ new home sales report will be out at 10 a.m. ET.
Economists expect that home prices fell 4.4% in May, while consumer confidence fell to a reading of 56.0 in July. New home sales are expected to remain roughly unchanged at 320,000 units.
Video game publisher Electronic Arts and online retailer Amazon.com are scheduled to report their results after the closing bell.
Wednesday: Wall Street will get quarterly results from Dow component Boeing before the bell on Wednesday. Analysts expect the aerospace giant will post a profit of 96 cents a share, according to Thomson Reuters.
Other companies reporting before the bell include Dow Chemical, glass maker Corning and oil conglomerate ConocoPhillips.
The Commerce Department will release June durable goods figures at 8:30 a.m. ET. The Federal Reserve releasing its July “Beige Book” at 2 p.m. ET.
Economists surveyed by Briefing.com expect that durable good orders rose by 0.4% in June.
After the closing bell, credit card processing company Visa will report its results.
Thursday: Oil giant Exxon Mobil reports its quarterly numbers before the opening bell. Analysts expect that Exxon earned $2.33 a share, helped in part by elevated oil prices.
The Labor Department will put out its weekly jobless claims numbers at 8:30 a.m. ET; economists expect claims fell by 3,000 to 415,000.
Investors will also get results from MetLife and Starbucks after Thursday’ closing bell.
Friday: Two Dow members will report their results before Friday’ bell: drug maker Merck and oil giant Chevron. Analysts are looking for Merck to post a profit of 95 cents a share, while Chevron is expected to earn $3.56 a share.
Investors will get the first reading on second-quarter GDP at 8:30 a.m. ET. Out after the bell is the Chicago purchasing managers index and the University of Michigan consumer sentiment survey.