Europe will again be at the centre of investors' focus next week as the US earnings season passes the halfway mark and there is little on the economic calendar to give the market direction. Economic data expected next week includes weekly initial jobless claims, the Thomson Reuters/University of Michigan's consumer sentiment index and international trade figures.
"It's the old ping pong game. Today it is the US, tomorrow it is Europe again," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey. "Normally in this type of tape when there is no economic news, it seems like the bias goes to the upside." But Europe and whether European bond yields spike or other news from Europe emerges will be the wild card for the markets, Saluzzi said.
Greece remains at the forefront of the euro zone crisis as the government continues to struggle for agreement on fiscal reforms that would be accepted by political leaders and private bondholders as it tries to avoid a disorderly default. The flood of earnings reports will slow next week. A total of 66 S&P 500 companies are expected to report, including Walt Disney Co, Coca-Cola Co and Cisco Systems Inc. NYSE Euronext is also due to report results after the exchange terminated merger plans with Deutsche Boerse on Thursday.