US stocks could slip this week if the spate of earnings from bellwethers including Apple Inc and Caterpillar Inc do not live up to heightened expectations. After a 60 per cent run-up in the stock market since March and the Dow again eclipsing 10,000,investors believe the market is priced to perfection. So if earnings fail to hold up their end,stocks could come under pressure. "We've had a tremendous rally," said Eric Kuby,chief investment officer at NorthStar Investment Management Corp in Chicago. "As we get into some of the little,bumpier earnings releases you're going to have some headline risk and a little bit of selling pressure." A surprisingly strong slate of early results from companies like Alcoa Inc and JPMorgan has given investors yet more proof of improvement in corporate America. So all told,if this week's results come in as hoped,sentiment might get a boost,but the mood may also just be as cautious as after results from General Electric and Bank of America,which dampened spirits. EARNINGS BLITZ US stocks fell on Friday as GE and Bank of America's disappointing results illustrated the road to economic recovery will be bumpy. Even so,indexes gained for the second straight week with the S&P 500 up 1.5 per cent,the Dow up 1.3 per cent and the Nasdaq up 0.8 per cent. "As we get further through the earnings season you're seeing whisper numbers rise," said Bruce Zaro,chief technical strategist at Delta Global Advisors in Boston. "So if companies don't blow out earnings,their stocks are going to see a sell-off." Besides 3M and Microsoft,the week's earnings roster also features 11 other Dow components,including McDonald's Corp,Pfizer Inc,Coca-Cola,American Express and DuPont. On the technology front,in addition to Apple and Microsoft,the spotlight will also fall on chipmaker Texas Instruments Inc and Internet retailer Amazon.com Inc,whose results may reveal how consumers are gearing up for the holiday shopping season. Web media company Yahoo Inc is also on tap,along with United Parcel Service Inc,eBay Inc,Kimberly-Clark,Altria Group and Hasbro Inc. Wells Fargo & Co and US Bancorp will also be among banks reporting. "You're going to hear a lot about commercial real estate,with a lot of regional banks reporting their earnings," said NorthStar's Kuby. "Throughout this entire seven-month rally the two areas of concern that people continue to point out are the consumer and commercial real estate. We are not out of the woods with either of those." According to Thomson Reuters data,61 companies in the S&P 500 had reported third-quarter results by Friday and 79 per cent of them beat Wall Street expectations. Overall,S&P 500 third-quarter results are forecast to show a drop of 22.6 per cent from a year ago.
