Europe Worries to Vie With Earnings in Coming Week

Following 12 blue-chip reports this past week, ten Dow components are slated to open their books next week: McDonald's(MCD) , DuPont(DD) , AT&T(T) , Boeing(BA) , Caterpillar(CAT) , 3M(MMM) , Exxon Mobil(XOM) , Chevron(CVX) , Merck(MRK) and United Technologies(UTX) .

In addition to these reports, technology bellwether Apple(AAPL) reports its fiscal third-quarter earnings on Tuesday. Analysts, on average, expect earnings of $10.38 a share on revenue of $37.35 billion.

It's been so far, so good for earnings season. The majority of companies are beating lowered profit expectations, but revenue performance hasn't been quite as good. FactSet Research said Friday just 45% of the 108 companies in the S&P 500 have delivered above-consensus sales.

That's well below an average of 56% at the same point in previous quarters over the past four years. It's also the lowest percentage of companies reporting sales above estimates at this stage of earnings season since the first quarter of 2009.

"Will this percentage improve?," wrote John Butters, senior earnings analyst at FactSet. "The past four years on average, the final percentage of companies reporting actual sales above the mean sales estimates has been 57%, just one percentage point higher than the average percentage at this point in the earnings season (56%)."

The economic calendar is relatively light in the coming week. Monday is clear and Tuesday has only the Federal Housing Finance Agency housing price index for May.

On Wednesday, investors will receive data on new-home sales and weekly crude investories. Thursday will bring weekly jobless claims, durable goods orders and June pending home sales. On Friday, the government plans to release an advance estimate of second-quarter GDP, while the University of Michigan plans to issue its final consumer sentiment reading for July.

"Employment will continue to be frustratingly slow," RBC's Wheelock predicts. "The employment number so distinctly bifurcated -- for those with a higher degree of education, the unemployment situation is not that bad. If you don't have a degree, many are unemployed. A number of people have been trained in jobs that no longer exist. Those jobs are gone forever. Those people need to be retrained. Until then, unemployment will be a drag."

-- Written by Alexandra Zendrian in New York.