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Stocks brace for volatility in earnings deluge; Fed meeting looms

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Will the Fed follow though with dovish sentiment at its July meeting?

With nearly a fifth of quarterly earnings results out, investors are divided on how early corporate reports are serving as an indicator of the overall health of the U.S. economy, and that could contribute to a volatile week as stocks linger near record highs. On Friday, stocks finished lower with the Dow Jones Industrial AverageDJIA, -0.15%  declining 0.3% for the week, and the S&P 500 index SPX, -0.04% and the Nasdaq Composite Index COMP, -0.04%  posting weekly gains of 0.5% and 1.2%, respectively. Earnings so far are confirming less-than-stellar economic data recently, said Paul Nolte, portfolio manager at Kingsview Asset Management. While some early reporting banks topped profit expectations, loan activity is still not robust, while revenue weakness from companies like International Business Machines Corp.IBM, -0.39%  are cause for concern, he said. Plus, a less-than-rosy profit outlook from General Electric Co. GE, -2.92%  on Friday added to concerns. Some of the economic factors being confirmed by earnings so far are weak inflation, and a softening of industrial production numbers like the Fed’s Philly manufacturing report and Empire State manufacturing index, Nolte said.

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