The three major stock indexes closed up for the previous week, with the Dow gaining 4 percent and the S&P 500 and the Nasdaq each gaining 4.5 percent. This was their best weekly performance in nearly three months.

Next week, investors will be looking at third quarter earnings reports, hoping to see real revenue increases as opposed to earnings based on cutting costs. Goldman Sachs (GS), expected to report earnings more than double of those one year ago, and Morgan Stanley (MS) are the first of the huge financial institutions to release data. Losses from loan defaults, mortgage foreclosures and credit card write-offs continue to erode bank profits, but are not so great a problem for the national banks as they are for regionals.

Intel (INTC) will be the first of the tech stocks to report and is forecast to show earnings of 27 cents per share. Two days later IBM is expected to report earnings of $2.38, compared to $2.04 for the same quarter last year. Google’s (GOOG) report will be of interest as an indicator that advertisers are willing to spend money again.

The coming week’s economic reports include Wednesday’s September retail sales. Economists expect a drop of 2.1 percent, although retailers are reporting, for the first time all year, a rise in same-store sales for the month. On Thursday, the Consumer Price Index is expected to show a monthly increase of 0.2 percent, but a yearly decline of 1.4 percent. Initial jobless claims are expected to be 525,000, nearly identical to the previous week’s figure.

Also of interest to investors this week is that Congress has scheduled committee work on two bills aimed at broader regulations for the banking industry and for capital markets.

12 Stocks to Watch

We're watching 12 stocks this week for potential breakouts. Our 12 stocks on the watch list are the following:

Dover Corporation (DOV)
Forest Laboratories, Inc. (FRX)
Hewlett-Packard Company (HPQ)
Hospira, Inc. (HSP)
Johnson & Johnson (JNJ)
M&T Bank Corporation (MTB)
Micron Technology, Inc. (MU)
Novellus Systems, Inc. (PNVLS)
Precision Castparts Corp. (PCP)
State Street Corporation (STT)
Tenet Healthcare Corporation (THC)
W.W. Grainger, Inc. (GWW)

Dave Mecklenburg is the Editor-in-Chief of TigerSharkTrading.com.