Last week, major stock market indexes fell on Friday, but were able to maintain weekly gains, with the S&P 500 up 1.5 percent, the Dow up 1.3 percent and the Nasdaq up 0.8 percent. Friday’s reports of GE’s (GE) 20 percent decline in revenue and Bank of America’s (BAC) one billion dollar loss for the quarter did not bode well for investor confidence in the economic recovery.

Next week, 13 of the Dow components will release their third-quarter earnings reports. Among the tech stocks reporting, Apple’s earnings per share are forecast to rise to $1.42 for the quarter, while Texas Instruments (TXN) and Microsoft (MSFT) are expected to show falling earnings. Investors will be looking to Microsoft’s data for indications of returning strength in the PC market.

Within the financial sector, Morgan Stanley (MS) is projected to show a profit after three consecutive quarterly losses. Wells Fargo’s (WFC) mortgage revenue is expected to decrease to 36 cents per share compared to 49 cents one year ago. Regional banks continue to struggle with foreclosures on home and commercial mortgages.

Consumers who make fewer credit card purchases and those who fall further behind on payments are expected to cut into earnings for American Express (AXP). Investors will be anxious to hear this company’s outlook for 2010. And investors will also be interested in what the results from online retailers and from McDonald’s (MCD) and Coca Cola (KO) will indicate about the direction in which consumer spending is heading, both in the U.S. and globally.

Investors are not expecting good news from the manufacturing sector. Caterpillar (CAT) will provide its first indications of the company outlook for 2010; projections that indicate 2010 will be worse than 2009 could negatively impact the entire sector. 3M (MMM) is expected to show lower profits for the quarter, a result of lower demand globally.

Economic data for the week will focus on housing. On Tuesday, data on building permits and housing starts will be released. On Thursday and Friday, respectively, information on housing prices and sales of existing homes will be available.

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11Stocks to Watch

We're watching 11 stocks this week for potential breakouts. Our 11 stocks on the watch list are the following:

CenterPoint Energy, Inc. (CNP)
Covidien PLC (COV)
Eaton Corporation (ETN)
FLIR Systems, Inc. (FLIR)
Goodrich Corporation (GR)
Norfolk Southern Corp. (NSC)
Pepco Holdings, Inc. (POM)
Sara Lee Corp. (SLE)
TECO Energy, Inc. (TE)
The TJX Companies, Inc. (TJX)
Union Pacific Corporation (UNP)

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