Investors are gearing up for the start of the US first-quarter earnings season with Alcoa set to report on Tuesday and they will be closely watching what kind of outlook corporate America sees for the months ahead.
Analysts estimate profits for companies in the S&P 500 increased 1 percent in the first three months of the year, down from 8.9 percent in the previous quarter, according to data compiled by Bloomberg.
Expectations have also been downgraded since the start of this year. Thomson Reuters data showed first-quarter S&P 500 companies' earnings are projected to have increased 1.2 percent from a year ago, down from the 6.5 percent growth seen at the start of the year.
Minutes from the latest Federal Open Market Committee will be released on Wednesday. First though, investors will eye speeches from several US policy makers for their take on the state of the economy including the latest employment data. On Friday, a government report showed US payrolls rose 192,000 in March, and there was an upward revision for February's gain to 197,000 from 175,000. The unemployment rate held at 6.7 percent in March.
The payrolls data showed "that the recovery process in the US is progressing," Ralf Umlauf, head of floor research at Helaba Landesbank Hessen-Thueringen in Frankfurt, told Bloomberg News. "Our view is that the growth scenario in the US is intact."
Today, St Louis Federal Reserve Bank President James Bullard is set to talk about monetary policy and the economic outlook in Los Angeles. On Tuesday, Minneapolis Fed President Narayana Kocherlakota will speak in Rochester, Minnesota, while Philadelphia Fed President Charles Plosser will discuss prudential regulation in Philadelphia.
On Wednesday, Chicago Fed President Charles Evans will talk about Fed communications in Washington, while Fed Governor Daniel Tarullo will give a dinner speech in Washington. On Thursday, Evans is part of a panel discussing central banking after the recession, in Washington.
US reports scheduled for release this week include consumer credit, on Monday; the NFIB small business optimism index, on Tuesday; wholes sale trade, on Wednesday; weekly jobless claims, as well as import and export prices, on Thursday; and the producer price index, and consumer sentiment, on Friday.
Last week, the Dow Jones Industrial Average rose 0.55 percent and the Standard & Poor's 500 index added 0.40 percent. The Nasdaq Composite index, however, slid 0.67 percent as investors dumped shares of some of the biggest internet companies including Google and Facebook.
Both the Dow and the S&P 500 touched intra-day record highs on Friday before ending the day lower.
Investors remained optimistic about the outlook for the broader market.
"We've been in a trading range, finding resistance at record levels, so this isn't cause for alarm," David Joy, chief market strategist at Ameriprise Financial in Boston, told Reuters. "I think there are bargains to be found, just not in the names that are getting hit. Financials are attractive here, as are industrials. The more mature tech names, especially on the software side, look valuable."
In Europe, the Stoxx 600 climbed 1.6 percent last week. Germany's DAX added 0.6 percent, the UK's FTSE 100 rose 1.2 percent.
Policy makers at the Bank of Japan are set to gather this week. So are their counterparts at the Bank of England.
The International Monetary Fund and World Bank will release updates to their outlooks ahead of the start of their spring meetings in Washington on Friday.