Stock rally: Meet more roadblocks

A stock rally that hit some potholes last week is likely to face more substantial roadblocks in the week ahead.

Roughly one-third of the S&P 500 reports results next week. Major economic reports are due on gross domestic product growth and consumer spending. The Federal Reserve holds its next policy-setting meeting. Chrysler's fate hangs in the balance. And investors gear up for the release of the "stress tests" of the major U.S. banks, due out in the following week.

Last week, regulators released a few details on how the government is running its tests, but results won't be announced until May 4. Some early results could start to trickle in later in the week.

"I think there's going to be some hesitation ahead of May 4th, particularly after the move we've seen over the last few weeks," said Christopher Colarik, portfolio manager at Glendmede

The major stock gauges rose for six straight weeks, with the Nasdaq composite making it to seven, on bets that the economy is closer to stabilizing and corporate profits are near to bottoming. The S&P 500 index gained almost 29% during that time. But last week's trading was more choppy amid worries of too much, too fast.

"I think investors are breathing a sigh of relief that analysts' estimates may have been too low," said Fred Dickson, chief market strategist at D.A. Davidson & co. "But I think stocks will face a real test this quarter, because I don't think the economic data will show as much improvement as investors might like."

Results: More than one-third of the S&P 500 companies have reported results and profits are currently expected to have declined 35% versus a year ago, according to the latest from Thomson Reuters.

Standouts this week include Dow components Exxon Mobil (XOM, Fortune 500), Chevron (CVX, Fortune 500), Pfizer (PFE, Fortune 500), Verizon Communications (VZ, Fortune 500) and Procter & Gamble (PG, Fortune 500). (See below for details.)
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Chrysler: The hard-hit company is facing a Thursday deadline to close deals with creditors, its labor union and Italian automaker Fiat, or face bankruptcy protection and possible liquidation. Chrysler has been operating on $4 billion in federal aid and needs more to stay afloat. The company is privately owned.

Last week, rival General Motors (GM, Fortune 500) said it is temporarily shutting down down 13 of 20 North American plants this summer to reduce inventory. The company is also planning to shutter its Pontiac brand, with an announcement expected Monday.

Healthier rival Ford Motor (F, Fortune 500) reported a steep quarterly loss Friday that was nonetheless not as steep as analysts had thought. The company said it won't need a federal loan like its rivals unless the slowdown gets significantly worse.

Over the last week, the woes of the industry have had a limited impact on Wall Street, but a Chrysler bankruptcy could be a very big deal.
Results

Nearly 30% of the S&P 500 reports results this week. Here are some of the highlights.

Monday: Telecom Verizon is expected to have earned 59 cents per share versus 61 cents a year ago, according to a consensus of analysts surveyed by Thomson Reuters.

Tuesday: Drugmaker Pfizer is expected to have earned 49 cents per share versus 61 cents a year earlier.

Thursday: Exxon Mobil is expected to have earned 94 cents per share, down from $2.03 per share a year ago.

Friday: Fellow oil behemoth Chevron is expected to have earned 81 cents per share versus $2.48 a year ago.
Economy

Tuesday: The April consumer confidence index from the Conference Board is expected to have rise to 28.8 from 26 in March. The S&P/CaseShiller Home Price index is expected to have fallen 18.8% from 18.97%.

The Federal Reserve Board holds its two-day policy setting meeting, with a decision on interest rates expected at the conclusion of the meeting Wednesday afternoon. The Fed is widely expected to hold a key bank lending rate steady near 0%.

Wednesday: First-quarter gross domestic product growth (GDP) is expected to have contracted at a 4.9% annualized rate, not as sharply as the 6.3% in the fourth quarter.

Thursday: A heavy day for economic news includes reports on weekly jobless claims, the first-quarter employment cost index and manufacturing in the Midwest.

The standout is the government's personal income and spending report for March. Income is expected to have fallen 0.2% in the month, as it did in February. Spending is expected to have fallen 0.1% after it rose 0.2% in March.

Friday: Reports are due on consumer sentiment, factory orders, and auto and truck sales. The biggest potential market mover will be the Institute for Supply Management's manufacturing index. The index is expected to have inched up to 38 from 36.3 -- still territory considered recessionary.