Alcoa kicks off second-quarter earnings season on Monday.
NEW YORK (TheStreet) -- Second-quarter earnings season starts in the coming week, and corporate reports are likely to set the tone for the stock market.
"Earnings and guidance, if they are really good or really bad, will win out," said Peter Tuz, portfolio manager at Chase Investment Council.
On Monday, Aluminum company Alcoa(:AA) kicks off earnings. On average, analysts anticipate Alcoa's second-quarter earnings will be 6 cents a share on revenue of $5.83 billion.
The Dow Jones Industrial Average ended the week up 1.04% at 12,771.86.
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The S&P 500 gained 1.85% during the week to close at 1,354.68, while the Nasdaq Composite rose 1.09% to 2,937.33.
Tuz says that this earnings season will be "OK, but the guidance will exceptionally cautious because you have just so much uncertainty out there."
He added, "A company can have an excellent quarter but then express caution with guidance, and the guidance will be listened to more than the actual number."
ING Investment Management chief market strategist Doug Cote anticipates that this will be a strong earnings season because "corporate profits continue to astound, and I think this quarter will be no different."
Cote forecasts that the financials, technology and consumer-discretionary firms will have the strongest earnings.
Regarding the financials, Cote said that the higher amount of lending that banks are doing with low rates is helping them by "rapidly repairing their balance sheets."
For the consumer discretionary companies, Cote points to the strong levels of consumer spending despite high levels of unemployment. And Cote noted that technology firms are well-positioned because when companies are revamping, they spend more on technology.
Headliners Google(:GOOG) and JPMorgan Chase(:JPM) are scheduled to report earnings Thursday and Friday, respectively.
On average, analysts expect the Internet search giant to report earnings of $10.14 a share on revenue of $8.45 billion.
JPMorgan Chase is expected to report second-quarter earnings of 79 cents a share on revenue of $21.91 billion, according to the analyst consensus.
Earnings won't be the only thing on traders' minds, however. The market is likely to continue digesting Friday's disappointing employment report.
Eighty thousand jobs were added in June, falling short of expectations for 90,000. The unemployment rate remained unchanged at 8.2%.
"I think employment has slowed down somewhat because of uncertainty with the fiscal cliff," Cote said.
On the economic calendar, the producer price index will be released on Thursday, and the Michigan sentiment report is due out on Friday.
PPI was previously down 1%; Briefing.com projects it will come in at -0.8% for the month of June.
Michigan sentiment for June was 73.2; Briefing.com anticipates it will be 72 in July.
And though concerns about the fate of the eurozone have impacted the market recently, Cote said that he thinks "Europe is off the table" for now because "Europe, to me, has cleared the worst, and it seems like it's on a reasonably good path."
-- Written by Alexandra Zendrian
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