Equities investors breathe easier

U.S. equities investors breathed a collective sigh of relief to start the week as corporate earnings are now expected to show growth for the third financial quarter. Were the U.S. to see a quarter of profit growth it would mean a turning point in the earnings recession that has haunted the market’s steps for the past year.

As Joel Elconin, host of Benzinga’s “PreMarket Prep Show,” pointed out, good earnings helped Netflix shares reach their highest price of the year, and pushed Microsoft to a new all-time high. “Morgan Stanley and Goldman Sachs followed suit with the financials that reported solid earnings late last week,” Elconin added.

Fears that a stronger dollar would dampen earnings, because of unfavorable exchange rates for corporations with foreign operations, seem not to have materialized. Still, nearly four fifths of the S&P 500’s firms have yet to report.

Only one of the three major indices closed higher, with the Nasdaq ending Friday up 0.30%, the Dow Jones Industrial Average down 0.09% and the S&P 500 down 0.01%.

Earnings

Next week will be perhaps the most high profile of this earnings season. Reporting companies will include Apple, expected to report Q4 results Tuesday of $1.65 in earnings per share on revenue of $47 billion.

Amazon is forecasted to have earned $0.80 per share on sales of $33 billion in its third quarter, while footwear and apparel upstart Under Armour is expected to report Q3 earnings of $0.25 on $1.5 billion in revenue.

Market talk

Market rumors were plentiful this week, as Coach was rumored to be buying luxury brand Burberry, which sources close to the matter have reportedly denied. Whole Foods was rumored to be under investigation for potential cases of food contamination at its Detroit location, which turned out to be true. The company says it is fully cooperating with the Detroit Health Department’s investigation.

Another rumor that gained a lot of traction was AT&T’s reported interest in merging with Time Warner. Media reports suggest the deal could be announced as soon as Monday, with AT&T paying north of $90 per share to acquire cable company Time Warner. Both companies have declined to comment on whether they’ve engaged in merger talks.

Apple events, despite being shrouded in secrecy, are known to feature the unveiling of new products or new, exciting features to existing products. Next week’s corporate event on Thursday may continue that tradition as many market spectators are passing around rumors that for the first time in several years the company will unveil first major updates to its line of Mac laptops.

Benzinga is a financial media outlet and a content partner of the Detroit Free Press. Get real-time, actionable investment advice at Benzinga.com.