US Stocks To Focus On Europe

(MarketWatch) - Investors in US stocks, which just wrapped up their best start of the year since 1987, are expected to shift their attention next week toward the ongoing eurozone crisis and earnings reports from bellwethers Cisco Systems and Walt Disney Co., among others.

The past week was an eventful period, with financial markets focusing on the filing of Facebook's $5 billion initial public offering and global economic data that culminated in a strong US jobs report.

On Friday, the Dow Jones Industrial Average closed at a May 2008 high, gaining 1.6 percent, to 12,862, for the week.

The Nasdaq Composite Index finished the week with a 3.2 percent gain at 2,906, its highest since December 2000, while the S&P 500 Index rose 2.2 percent on the week. Like the Nasdaq, both indexes are now on five-week winning streaks. The S&P 500 posted its best start of the year since 1987, gaining 6.9 percent.

Stock markets will open Monday in the wake of upbeat jobs data from the US Labor Department, which reported Friday that the economy added 243,000 jobs in January, bringing the nation's unemployment rate down to 8.3 percent.

Now the attention is expected to shift back to the financial crisis in Europe, and negotiations over the conditions for bailing out Greece.

Along with the usual reaction to the European debt crisis, US investors will have quarterly reports from a group of market leaders that includes Cisco, Disney, Coca-Cola and Visa.

Cisco reports its results Wednesday, and the networking-equipment giant is typically seen as a barometer by which investment in corporate technology is measured. Analysts surveyed by FactSet Research estimated Cisco will earn 43 cents a share on revenue of $11.2 billion in revenue.

Wall Street analysts also are looking for the Mouse House to earn 71 cents a share on $11.2 billion in sales, and for Coca-Cola to earn 78 cents a share on revenue of almost $11 billion when those companies report quarterly results Tuesday.

Two major social-media companies also report quarterly results next week, with Groupon delivering its fourth-quarter results Wednesday and LinkedIn giving its fourth-quarter report Thursday.

Earnings reports have been solid enough so far to support year-to-date gains for stocks, though they have shown some weak spots.

Of the more than 270 S&P 500 companies that have reported earnings, 65 percent have beat earnings per-share estimates, below the 73 percent average of the past four quarters, according to FactSet.

Read more: MarketWatch