A suddenly resurgent Wall Street, riding a wave of economic optimism, faces challenges in the coming week with a slew of earnings reports and a detailed US Federal Reserve outlook.
The market staged a powerful rally in the past week, helped by upbeat results in the first in a series of corporate earnings releases and an upwardly revised economic outlook from the central bank.
But investors will be looking for signs to reinforce their optimism, and will scrutinize dozens of corporate updates as well as the semiannual economic report to Congress and comments from Federal Reserve Chairman Ben Bernanke.
Over the past week, the Dow Jones Industrial Average shot up 7.33 percent over the week to Friday to 8,743.94, ending a four-week losing streak for blue-chips.
The broad-market Standard & Poor? 500 index leapt 6.97 percent to 940.38 and the tech-heavy NASDAQ rallied 7.44 percent over the week to 1,886.61.
After several weeks of consolidation and hesitation, the market was energized by generally strong earnings from the banking sector that suggested a healing in the financial system critical to recovery.
Also fueling the rally was Wednesday? release from the Fed of its updated economic forecast, showing a likely end to the economic slump this year despite a rise in its unemployment outlook.
Bernanke appears in Congress on Tuesday to offer more details on the Fed outlook, but many analysts are saying they see the end of the recession in sight.
Al Goldman, chief market strategist at Wells Fargo Advisors, said the dramatic rally came with many market participants caught short of stocks and rushing to get in on the rally.
?o many were caught on the wrong side of the market and couldn? stand the pain any longer,?he said. ?etter-than-expected earnings and forward comments have helped the mood and will continue to be a positive for the market the rest of the year.?br />
Also to be closely watched are earnings reports from key firms in the coming week 虹ncluding 耶aterpillar, Coca-Cola, Apple, Wells Fargo, Boeing and Yahoo!.
Bonds fell sharply amid a shift to equities. The yield on the 10-year Treasury note rose to 3.651 percent from 3.413 percent a week earlier and that on the 30-year bond climbed to 4.529 percent from 4.201 percent. Bond yields and prices move in opposite directions.