The results of Treasury's long-awaited stress tests of the leading banks are due Thursday; the April employment report is due Friday; and a smattering of big corporations report results.

"The results of the stress tests will be interesting as there have been some questions about whether the government will be too gentle on the companies," said Matt King, chief investment officer at Bell Investment Advisors.

King said that the April employment report, although expected to show steep job losses, is unlikely to fluster stock market participants beyond the short term. That's because historically unemployment tends to keep rising even as a recession is ending.

Standouts on the corporate front include Sprint Nextel (S, Fortune 500), Walt Disney (DIS, Fortune 500), Cisco Systems (CSCO, Fortune 500), AIG (AIG, Fortune 500) and others.

Better-than-expected earnings and economic reports have supported stocks of late, fueling bets that the worst is over.

Stress tests: The results of the government "stress tests" of the largest U.S. banks will be made available Thursday afternoon. The results were initially due to be released Monday.

Information will be made available on the 19 individual companies as well as the broad group of corporations that have been tested. Results include estimated loan losses should the economy deteriorate more rapidly as well as estimates of how much additional capital banks would potentially need to function.

"We've been waiting on the results for weeks, but because the health of the banks has stabilized, there's not a sense of urgency to get those results," said David Levy, portfolio manager at Kenjol Capital Management.

He said that there are reportedly a half dozen banks that are not as well capitalized as they should be and they've been given until Thursday to work through some of the issues.

"By giving them a little more time, there's not going to be a rash reaction in the markets," he said.

Last week, reports said early results showed both Bank of America (BAC, Fortune 500) and Citigroup (C, Fortune 500) and will need to raise more capital.

The second-quarter so far: Stocks rallied in April, with the S&P 500 (SPX) spiking 9.4% as investors continued to jump back in after the broad index fell to a 12-1/2 year low in March. For the month, the Dow Jones industrial average (INDU) gained 7.3%, also rebounding from a 12-year low.

The Nasdaq (COMP) gained 12.3% and is the only one of the major gauges to be in the black year-to-date. The Nasdaq has risen for eight weeks in a row, while the S&P 500 and Dow have risen for seven of the past eight weeks.

Profits: Stocks are on track to post the seventh straight quarter of year-over-year profit declines, according to earnings tracker Thomson Reuters.

With roughly two-thirds of the results already out, S&P 500 profits are expected to have declined by 35.1% from a year ago. Healthcare is the only one of the S&P's 10 sectors expected to see growth. The biggest decliners are consumer discretionary - which includes the automakers - materials and energy.

On the upside, companies as a whole have been beating analysts' expectations by a bigger margin than in previous quarters.

"The numbers have come down to such levels that companies are not only beating forecasts, but beating by a lot," said John Butters, senior research analyst at Thomson Reuters.

Bank of America (BAC, Fortune 500), Goldman Sachs (GS, Fortune 500), Citigroup (C, Fortune 500) and Ford Motor (F, Fortune 500) are among the big companies that have reported better-than-expected results. However, profits remain in a slowdown period for the time being.

For the second quarter, analysts expect profits to decline 34.6% and for the third quarter, profits are expected to have declined 21.1%.

Monday: Sprint Nextel reports results before the start of trading. The telecom is expected to have lost 5 cents per share after gaining 4 cents per share a year ago, according to Thomson Reuters estimates.

Tuesday: Walt Disney is expected to have earned 40 cents versus 58 cents per share a year ago. The Dow component reports results shortly after the close of trading.

Wednesday: Cisco Systems reports results after the close of trading. The tech bellwether is expected to have earned 25 cents per share versus 38 cents a year ago.

Thursday: AIG reports results after the close of trading. The financial firm - bailed out by the government last fall - is expected to report a loss of 6 cents per share versus a loss of $1.41 a year ago.

Monday: Reports are due shortly after the start of trading on pending home sales and construction spending.

The March pending home sales report, from the National Association of Realtors, is due out before the start of trading. Sales are expected to hold steady following a surprise rise of 2.1% in February, according to a consensus of economists surveyed by Briefing.com.

March construction spending, from the Census Bureau, is expected to have fallen 1.4% after falling 0.9% in February.

Tuesday: The Institute for Supply Management's April services sector index is due out shortly after the start of trading. The ISM index is expected to have risen to 42.0 from 40.8 in March.

Also Tuesday morning, Federal Reserve Chairman Ben Bernanke heads to Washington to give his economic outlook before the Joint Economic Committee.

Wednesday: Payroll services firm ADP releases its April reading on private sector employment, seen as a harbinger for the government's big report due out Friday. Employers are expected to have cut 643,000 from their payrolls after cutting 742,000 in the prior month.

The government's weekly report on crude inventories is also due in the morning.

The Senate Banking Committee holds a hearing on banks that have been deemed "too big to fail." Federal Deposit Insurance Corp. chief Sheila Bair is due to testify. She is expected to reiterate calls for creating a system that would allow regulators to dismantle large financial institutions that are failing.

Thursday: Reports are due before the start of trading on first-quarter productivity and first quarter unit labor costs.

Productivity is expected to have risen 0.9% after falling 0.4% in the last quarter of 2008. Unit labor costs are expected to have risen 2.5% in the first quarter after rising 5.7% in the fourth quarter of 2008.

Thursday also brings the weekly jobless claims report from the Labor Department and the March consumer credit report from the Federal Reserve.

Fed Chairman Bernanke also gives the keynote address at the Federal Reserve Bank of Chicago's Conference on bank structure and competition Thursday morning. His topic is banking supervision.

Friday: The government's April employment report is due out before the start of trading. Employers are expected to have cut 620,000 jobs from their payrolls after cutting 663,000 the previous month. The unemployment rate, generated by a separate survey, is expected to have risen to 8.9% from 8.5% in March.

Friday also brings the March reading on wholesale inventories, which is not usually a big market mover. 

The Dow Jones industrial average (INDU) gained 88 points, or 1%, nearly 90 minutes into the session. The Dow ended the previous session at a more than two-month high.

The S&P 500 (SPX) index added 11 points, or 1.3%, after ending the previous session at a three-month high. The Nasdaq composite (COMP) rose 33 points, or 1.9% after ending the previous session at the highest point in almost six months.

Stocks rallied Wednesday after the Federal Reserve gave a slightly more bullish outlook on the economy. That forecast was supported by a few signs of stabilization in the morning's otherwise bleak first-quarter GDP report.

Bets that the economy is not far from finding its footing have boosted stocks for nearly two months, lifting the Dow by roughly 25% since it hit 12-year lows on March 9.

Economy: Weekly jobless claims slipped to 631,000 last week from a revised 645,000 the previous week. Economists surveyed by Briefing.com expected 640,000 new claims. Continuing claims - the number of people receiving benefits for a week or more - topped 6.27 million for the first time.

Personal income and spending fell more than expected in March. Income fell 0.3% after falling 0.2% in February. Economists thought income would fall 0.2%. Spending fell 0.2% after rising 0.4% in February. Economists thought it would fall 0.1%.

The Chicago PMI, a regional read on manufacturing, continued the recent trend of not-as-bad-as-expected reports. The index rose to 40.1 in April from 31.4 in March, a 7-month high and well above economists' expectations for a rise to 35.

The Labor Department's Employment Cost Index rose by 0.3% in the first quarter, the lowest rise on record and short of the 0.5% increase economists were expecting.

Chrysler: The automaker is set to file for Chapter 11 bankruptcy protection Thursday, an Obama administration official confirmed to CNN.

Chrysler was fighting against the clock to reduce debt, but some of the company's smaller lenders balked at giving in to Treasury Departments demands to reduce the amount of debt outstanding. Chrysler already reached an agreement with its union on concessions and is in the process of completing a deal with Italian automaker Fiat.

The company will continue to operate while under bankruptcy protection. (Full story)

Investors seemed to take the news in stride as both Chrysler and rival General Motors (GM, Fortune 500) have been flirting with the threat of bankruptcy for months.

Quarterly results: Dow component Exxon Mobil (XOM, Fortune 500) reported weaker earnings that missed analysts' forecasts on weaker revenue that topped forecasts.

Dow component Procter & Gamble (PG, Fortune 500) reported weaker earnings that topped estimates on weaker revenue that missed estimates.

Fellow consumer products maker Colgate-Palmolive (CL, Fortune 500) also posted lower earnings that beat forecasts on lower revenue that missed expectations.

Starbucks (SBUX, Fortune 500) reported weaker earnings after the market close Wednesday that nonetheless topped estimates.

In other company news, Bank of America (BAC, Fortune 500) said late Wednesday that Ken Lewis has been removed as chairman, but will stay on as CEO and president.

Bonds: Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.13% from 3.09% Wednesday. Treasury prices and yields move in opposite directions.

Lending rates were mixed. The 3-month Libor rate fell to 1.02% from 1.03% Wednesday, according to Bloomberg.com. The overnight Libor rate was unchanged at 0.23%. Libor is a bank-to-bank lending rate.

Other markets: In global trading, Asian markets ended higher and European markets rallied in afternoon trading.

In currency trading, the dollar gained versus the euro and the yen.

U.S. light crude oil for June delivery fell 23 cents to $50.74 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery fell $16.50 to $884 an ounce. 

The stock market since the president took office.

NEW YORK (CNNMoney.com) -- Stocks rallied Wednesday afternoon after the Federal Reserve held interest rates steady, as expected, but issued a slightly more upbeat economic outlook.

After the close, Bank of America said Ken Lewis has been removed as Chairman, but will stay on as CEO and president.

The Dow Jones industrial average (INDU) gained 169 points, or 2.1%, closing at the highest point since Feb. 9.

The S&P 500 (SPX) index added 18 points, or 2.2% and ended at the highest point since Jan. 28. The Nasdaq composite (COMP) rose 38 points, or 2.3% and ended at the highest point since Nov. 3, 2008.

Stocks spiked even more in the first half hour after the 2:15 p.m. ET Fed announcement, but lost some steam late in the session.

Investors found positives in the day's bleak report on first-quarter economic growth, pushing stocks higher at the open. The markets extended those gains after the Fed opted to keep the fed funds rate, a key short-term interest rate, at a historic low near zero.

In its statement, the bank gave a more upbeat take on the economy than it has recently, although the tone remained cautious. The Fed said that "although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time."

The statement also said the pace of contraction appears to be somewhat slower, a belief that has helped lift stocks over the last two months, said Stephen Stanley, chief economist at RBS Securities.

"It's not like they were wildly optimistic, but they acknowledged that the data have been a little better, the consumer is stabilizing and that market conditions are improving, " he said. "They think that the improvement we've seen in financial market conditions over the last month is likely to continue."

Thursday preview: Quarterly results are due in the morning from Dow components Exxon Mobil (XOM, Fortune 500) and Procter & Gamble (PG, Fortune 500).

In a big day for economic news, reports are due on personal income and spending, weekly jobless claims, manufacturing in the Midwest and the first-quarter employment cost index.

Thursday is also the deadline for Chrysler to come up with the necessary concessions to avoid filing for bankruptcy. The company has already made deals with its union and creditors. Late Wednesday, reports said the company reached a deal with Italian automaker Fiat, fulfilling the government's third requirement for the company to avoid bankruptcy.

Recharging the rally: Stocks were rising again after two down sessions, recharging the advance that boosted the major gauges all more than 20% over a six-week period. Last week, only the Nasdaq gained, with the Dow and S&P 500 posting small losses.

After a period of consolidation on the back of a strong move, stocks are now moving higher, said Michael Church, president at Addison Capital.

"There have been some reports and earnings that were not as bad as expected and that's helped," Church said. "At one point, investors were fearing the apocalypse, but it's become clearer that that's not what is happening."

Wall Street retreated Monday on worries about the potential economic impact of swine flu. On Tuesday, stocks slipped on reports that Bank of America (BAC, Fortune 500) and Citigroup (C, Fortune 500) may need more capital should the recession deepen.

Fears that major banks may need more cash on hand have been in play this week ahead of the results of Treasury's "stress tests" of the largest companies, due next Monday.

"I think people are just looking forward to the tests being over," said Church.

GDP: The economy shrank at a faster-than-expected pace in the first quarter, surprising economists who were looking for an even slower pace of contraction after a rough fourth quarter of last year.

Gross domestic product fell at a 6.1% annualized rate in the first quarter after falling 6.3% in the fourth quarter. Economists thought it would fall at 4.7% pace, according to Briefing.com forecasts.

GDP was weighed down by a sharp decline in exports and plummeting business inventories. However, the inventory slowdown was seen as a positive, as it could mean the correction cycle is ending.

In addition, personal consumption rose, after falling in the previous quarter, raising hopes that consumer spending will pick up.

In other economic news, home loan applications fell last week to the lowest levels in more than a month due to a drop in refinancing demand.

Wednesday also marked President Obama's 100th day in office.

Banks: Citigroup (C, Fortune 500) has reportedly asked Treasury if it can pay out bonuses to certain workers, according to the Wall Street Journal. Citi has received $45 billion in federal bailout money and may need to raise more. Shares gained 8%.

Wells Fargo (WFC, Fortune 500), Goldman Sachs (GS, Fortune 500), Morgan Stanley (MS, Fortune 500) and Fifth Third (FITB, Fortune 500) were among the other gainers. The KBW Bank (BKX) sector index rose 5%.

Company news: Aetna (AET, Fortune 500) reported higher quarterly sales and earnings that topped estimates. But the health insurer also said it saw higher-than-expected medical costs. Shares slumped 10%.

Time Warner (TWX, Fortune 500), the parent of CNNMoney.com, reported weaker quarterly profit on slowing ad sales, but results were better than what analysts were expecting. Shares gained 1%.

Dendreon (DNDN) shares rallied 94% in its first day of trading after saying its experimental treatment for advanced prostate cancer extended the lives of men suffering from the disease by four months. Shares were halted after the Tuesday afternoon announcement.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by more than five to one on volume of 1.48 billion shares. On the Nasdaq, advancers topped decliners by over three to one on volume of 2.41 billion shares.

Bonds: Treasury prices tumbled, raising the yield on the benchmark 10-year note to 3.09% from 3.01% Tuesday. Treasury prices and yields move in opposite directions.

Lending rates were mixed. The 3-month Libor rate fell to 1.04% from 1.05% Monday, according to Bloomberg.com. The overnight Libor rate was unchanged at 0.21%. Libor is a bank-to-bank lending rate.

Other markets: In global trading, most Asian and European markets ended higher.

In currency trading, the dollar fell versus the euro and gained against the yen.

U.S. light crude oil for June delivery rose $1.05 to settle at $50.97 a barrel.

COMEX gold for June delivery rose $6.90 to settle at $900.50 an ounce. 

 

NEW YORK (CNNMoney.com) -- Stocks slipped Tuesday, ending a choppy session with declines as a stronger-than-expected consumer confidence report competed with jitters about the health of U.S. banks and the possible economic impact of swine flu.

The Dow Jones industrial average (INDU) lost 8 points, or 0.1%. The S&P 500 (SPX) index slipped 2 points, or 0.3%. The Nasdaq composite (COMP) eased 5 points, or 0.3%.

Stocks seesawed through the session as investors sorted through the day's news. The indecision came after a six-week-long broad-based rally on bets that the worst for the economy has already happened -- a rally that began to sputter last week as quarterly results came in.

"I think the rally is going to end up getting recharged, but the market is probably going to drift sideways for a while," said Gary Webb, CEO at Webb Financial Group.

This week, investors have been keeping an eye on the banks and the latest reports on the swine flu outbreak.

"The markets are experiencing a bit of a tug-of-war," said Michael Sheldon, chief market strategist at RDM Financial Group.

"The economic news was somewhat better than expected," he said. "However, we've come a long distance over a short period of time and investors continue to worry about the implications of the spread of the flu virus."

Sheldon said the two biggest longer-term issues that remain unresolved are a bottom in the housing market and the potential need for more capital among the country's banks.

Wednesday brings the conclusion of the Federal Reserve's two-day policy meeting, in which the central bank is expected to hold interest rates steady at historic levels near zero.

Wednesday also brings the reading on first-quarter gross domestic product growth. GDP is expected to have shrank at a 4.7% annualized rate after shrinking at a rate of 6.3% in the fourth quarter.

Confidence improves: The April consumer confidence index rose to 39.2 from a revised 26.9 in the previous month. Economists surveyed by Briefing.com thought it would improve to 29.7.

Bank sector: Bank of America (BAC, Fortune 500) and Citigroup (C, Fortune 500) will need to raise more capital, according to initial government "stress tests," the Wall Street Journal reported. Regulators reportedly told the banks that they need to boost their reserves to prepare for a potential worsening of the economy.

Results of Treasury's tests of the largest U.S. banks aren't due until next week. Citi, saying it couldn't disclose test results, issued a statement assuring that its capital base is strong.

Bank of America shares fell 8.6%, Citi dropped 6% and the KBW Bank (BKX) sector index fell 3%.

Swine flu: Concerns about the economic impact of the swine flu outbreak remained in place Tuesday as health officials have confirmed at least 90 cases of the disease worldwide and 50 in the United States.

Economists are concerned that should the outbreak become a large-scale pandemic, it would throw off a global economic recovery attempt and even intensify the recession.

Automakers: Chrysler said it has made a deal with its creditors to reduce $7 billion in loans, inching it closer to resolving its financial crisis. Over the weekend, the automaker said it won key concessions from its union. The company also needs to hammer out a deal with Italian automaker Fiat ahead of the Thursday deadline to avoid bankruptcy.

Both Chrysler and General Motors (GM, Fortune 500) have been getting by on billions in government aid. General Motors has until June 1 to cut debt and avoid bankruptcy. On Monday, the company announced a broad restructuring plan.

Quarterly results: Drugmakers Pfizer (PFE, Fortune 500) and Bristol-Myers Squibb (BMY, Fortune 500) reported results Tuesday morning.

Pfizer reported lower quarterly earnings that topped expectations on lower revenue that missed expectations. The company saw sales of its blockbuster Lipitor lose out to cheaper generic versions. However, cost cutting helped limit any declines.

Bristol-Myers Squibb reported weaker earnings that topped estimates on higher revenue that missed estimates. The company was hurt by weaker sales of Erbitux, its colon cancer medicine.

Company news: IBM (IBM, Fortune 500) said Tuesday that it will increase its quarterly dividend by 10% and will buy another $3 billion of its outstanding stock.

In other news, biotech Dendreon (DNDN) said its experimental treatment added four months to the lives of men with advanced prostate cancer. But Dendreon shares tumbled 45% before the stock was halted, ahead of the news.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by a narrow margin on volume of 1.07 billion shares. On the Nasdaq, advancers beat decliners five to four on volume of 1.95 billion shares.

Economy: The S&P/Case Shiller 20-city home price index fell 18.6% in February from a year ago, extending the losing streak to 31 months. But it was the first time since October 2007 that the index didn't hit a record low in its year-over-year drop.

Bonds: Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.01% from 2.92% Monday. Treasury prices and yields move in opposite directions.

Lending rates were mixed. The 3-month Libor rate fell to 1.04% from 1.05% Monday, according to Bloomberg.com. The overnight Libor rate was unchanged at 0.21%. Libor is a bank-to-bank lending rate.

Other markets: In global trading, Asian and European markets ended lower.

In currency trading, the dollar fell versus the euro and the yen.

U.S. light crude oil for June delivery slipped 90 cents to settle at $49.24 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery fell $14.60 to settle at $893.60 an ounce.