Microsoft, America Online, Sun Microsystems, IBM, Intel, Apple Computer and eBay are just some of the industry titans scheduled to report earnings this week. The shares of some of the companies--notably Intel and Apple--fell sharply in recent weeks after the companies warned of revenue shortfalls.
Investors also will be anxiously awaiting the reports from companies that did not issue warnings.
"There's a great deal of hope that companies that haven't warned are OK," said Bill Meehan, chief market strategist with Cantor Fitzgerald. "People are preparing to say, 'Aha, we're through with that mess and now we're going to get those great earnings that are going to take us up for the next year.'"
But in some cases, companies that have already warned are still getting taken down a notch or two.
Intel, for example, last month warned of a third-quarter sales slowdown. But as the chip giant prepared to release its results Tuesday, its stock took another hit Monday, falling more than 10 percent in midday trading.
The company fell $4.81, or about 12 percent, to $35.56 in afternoon trading after Salomon Smith Barney analyst Jonathan Joseph reported that the world's biggest chipmaker faces weaker demand at a time that it's also adding capacity. He cut Intel's target price target to $50 from $75.
"I wouldn't be surprised to see Intel come in a penny or two above their revised estimates. If they miss, they'll have a problem," said Chuck Hill, a spokesman for First Call/Thomson Financial. Analysts polled by First Call expect Intel to earn 38 cents per share.
If companies do not shine this week, analysts predict they will be slammed, as were Priceline.com, Apple and Intel, whose shares lost 42 percent, 50 percent and 22 percent, respectively, after issuing earnings warnings.
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"The only way a company is going to trade upwards is if it (issues) a report like Juniper and they soundly beat expectations. That's the only scenario," said Sunil Sharma, a research analyst at Lehman Brothers. "I think if companies meet or slightly exceed expectations they're basically going to trade sideways."
Last week, Juniper Networks, which sells high-speed networking devices, announced a third-quarter profit of 17 cents per share, almost doubling analysts' 9 cent estimate. The news sent the company's stock up $28.90, or 14 percent, to $228.50.
Meanwhile, much is at stake for those companies that have remained mum, particularly those such as Sun and others in the networking and telecommunications sectors.
Several analysts have pinpointed Sun, which sells servers and is considered a so-called new-economy stock, as a company whose results could strongly influence the market this week.
"If Sun comes in and disappoints, I think that will be much more painful to the Street than any of the others," said Jeff deGraaf, chief technical analyst at Lehman Brothers. "So far the stock has been able to emerge almost unscathed from this correction. Investors see it as there's still someplace to hide, to have some solace."
Analysts who cover Sun are optimistic about the company. On Monday, Merrill Lynch analyst Thomas Kraemer upped his earnings estimate to 28 cents per share, from 25 cents.
Sun has a reputation of beating analysts' estimates, First Call's Hill noted. "If Sun doesn't come in at 26 cents, they may have a problem. Anything below 25 cents will be a problem," he said.
Microsoft is expected to post earnings of 41 cents, according to First Call. But Hill noted that "Microsoft has a history of beating the numbers, so if it doesn't come in at 42 cents, we may have a problem too."
Shares of the software giant tumbled more than 6 percent Monday--to their lowest level in two years--on continued concerns about the health of the PC market.
The latest fall was sparked by fresh concerns over the market for microprocessors, the chips that form the hearts of personal computers that run Microsoft software, analysts said.
In addition to the earnings reports this week, other macroeconomic issues may continue to rock the markets.
"There are too many variables right now," said Bryan Piskorowski, market strategist for Prudential Securities. "There are problems with the euro, oil prices and the pending (presidential) election. Too many balls are being juggled right now, and it's impeding on any upside action."