FORBES: Can Buffett Restore The Rally?

Peter C. Beller, 05.17.09, 10:00 AM EDT

Next week brings real estate numbers, Fed minutes the first trades after Buffett's bank buys.

Investors are hoping next week brings optimism back as the two-month stock rally fizzled a bit with stocks down last week. The S&P 500 finished the week off 5% and remains in negative territory for the year but the markets have mostly been buzzing with notions that the wreckage of the financial crisis bottomed out in March. Since then stocks are up more than 30%.

Turning in quarterly earnings reports on Monday are home improvement chain Lowe's ( LOW - news - people ), before the bell, and clothing company American Apparel, after trading ends. Analysts expect Lowe's to announce profits of 25 cents a share, down sharply from 41 cents last year. Wall Street expects American Apparel to swing into the red with a five cents-a-share loss compared to a two-cent profit last year. American Apparel is also being sued by celebrated film auteur Woody Allen.

Lowe's rival Home Depot ( HD - news - people ) is expected to report a similarly downbeat quarter before trading begins on Tuesday. Tech giant Hewlett-Packard ( HPQ - news - people ) may come in with a quarterly profit down just a penny from last year when it announces after Tuesday's trading ends.

Next week's economic data kicks off with the National Association of Realtors' housing market index on Monday afternoon. Housing starts from the Commerce Department come out Tuesday with economists expecting a slight uptick for the April period.

The minutes of the Federal Open Market Committee's late-April meeting come out Wednesday mid-afternoon while Treasury Secretary Timothy Geithner testifies about the bank bailout before the Senate. Mass-market chain Target ( TGT - news - people ) releases its earnings report on Wednesday, too. On Thursday markets get a look at weekly unemployment claims and mortgage rates.

Warren Buffett may have restored some luster t banking stocks Friday afternoon when Berkshire Hathaway ( BRK - news - people ), the Oracle of Omaha's conglomerate, revealed that it boosted its stakes in Wells Fargo ( WFC - news - people ) and U.S. Bancorp ( USB - news - people ) in the first quarter of the year (see "Buffett Banks On Wells Fargo"). Financials took a drubbing this week with the Financial Select Sector SPDR ETF losing 11.4% to the S&P 500's 5% loss.

Insurers will be in the spotlight next week as markets watch and wait for various firms to decide on whether to accept government bailout money and how much to ask for. As with banks, insurance chiefs have to weigh the need for emergency capital, after seeing their investment portfolios wither, against the need to project strength by refusing taxpayer charity (see "Insurers Set To Tap TARP").

Related Links

Share Investor Blog - Stockmarket & Business commentary
Share Investor New Zealand Business News- Get more business news
Discuss this topic @ Shareinvestor.net.nz
Share Investor's Daily Forex Updates

Recommended Amazon Reading

How to Think Like Benjamin Graham and Invest Like Warren Buffett by Lawrence A. Cunningham
Buy new: $14.93 / Used from: $8.49
Usually ships in 24 hours

Kindle 2/Kindle DX: Amazon's New Wireless Reading Devices (Latest Generation)
Thomson Reuters and the Associated Press contributed to this report.