Many factors of the broader economy influence the daily movement of stock prices. But in the long run, the value of individual stocks depends on earnings, which is why traders focus on quarterly statements. Scorecards are starting to be released for the fourth quarter of 2008, providing a cautious tone as investors return to action following the Martin Luther King Jr. holiday.
Earning statements, however, look in the rear-view mirror at what was. That's why guidance companies' offer about 2009 will also be carefully scrutinized, for signs about just how bad things might get in the year ahead.
Corporate data may also dominate headlines in the financial press because release of economic reports is fairly light in this holiday-shortened week. The market will also be watching Washington, and not just for the grandeur of the inauguration. The fate of the new president's stimulus is still up in the air, much less whether it will work. Delays over confirmation of members of the Obama economic team also have Wall Street on edge.
To read Bryce Knorr's complete weekly financial review, click HERE.
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