October 14, 2001	Sunday	Rajab 26, 1422

NEW YORK, Oct 13: US stocks are poised to rise next week as investors look past the flood of expected earnings reports and see a potential rebound in the economy and corporate profits.

Wall Street is already forecasting the worst period for earnings in a decade. But with the trickle of earnings reported so far mostly in line with expectations, investors don’t expect more bad news. Any positive surprises would be favorably received.

One caveat, though: More attacks on US soil such as the crash of hijacked commercial jets into New York’s World Trade Center and the Pentagon on Sept. 11, and all bets are off.

The market next week will continue to be dictated by earnings numbers, said Owen Fitzpatrick, head of US equities at Deutsche Bank Private Banking, which oversees $9 billion in assets.

Earnings so far, so good companies reporting this week like General Electric Co. have given the market some confidence. If that pace continues, the market will trade higher and that is exactly what investors are looking for.

Global powerhouse General Electric, the world’s largest company in terms of market value, bolstered investors’ optimism on Thursday when its earnings met Wall Street’s expectations.

The good earnings news from GE and other companies inspired a rally, especially in technology stocks, that drove both the tech-laced Nasdaq Composite Index and the broad Standard & Poor’s 500 Index back up to end above their closes on Sept. 10, the day before the attacks.

Blue-chip technology companies set to report results next week include Intel Corp., the world’s largest chipmaker; International Business Machines Corp., the huge computer hardware maker and services provider also known as “Big Blue,” and Microsoft Corp., the software giant.

Economic reports scheduled for release, including the Consumer Price Index and housing starts, are unlikely to affect the market, given the heavy earnings load.

But stocks might pull back if the United States is seen suffering setbacks in its military campaign against Afghanistan, or if there are more attacks at home.

On Thursday night, President George W. Bush said US forces would attack Afghanistan for as long as it takes, while the Federal Bureau of Investigation warned America of possible new attacks.

I think the market will try to move up in the absence of negative news, said Joe Stocke, chief investment officer at StoneRidge Investment Partners LLC, which oversees $1 billion in assets. But the market will retrace gains of the past week on negative developments.

Friday’s anthrax scare is not expected to directly affect the market in coming days, other than add to the general uncertainty.

Profits for S&P 500 Index companies are expected to shrink by 22.4 per cent this quarter, making it the worst quarter for profits since the second quarter of 1991, according to research firm Thomson Financial/First Call.

The outlook has steadily eroded since Sept. 11 after a slew of warnings based on the downturn in the economy after the deadly attacks. Before Sept. 11, profits for companies in the index were forecast to drop by 14.76 per cent, First Call said.—Reuters