Finance Latest News: As Earnings Take Over, Fundamentals to Be Tested

Wochit 1:42 mins

Next week marks the first big week of second-quarter earnings, and it is sure to bring both joy and misery to Wall Street. Investors will concentrate on market fundamentals after weeks when Federal Reserve policies have dominated the market. If they see companies are still struggling, stocks could take a fall. Even after Fed Chairman Ben Bernanke scared markets in June by telling investors the Fed is likely to reduce monetary stimulus in coming months, stocks have recovered, with both the Dow and S&P 500 climbing to all-time highs. The official Xinhua News Agency corrected a dispatch that quoted the finance minister as saying growth could be 7 percent this year, in an apparent attempt to defuse market worries on a more severe slowdown. Xinhua's corrected story clarified that Minister Lou Jiwei, speaking in Washington, said: "There is no doubt that China can achieve this year's growth target of 7.5 percent". That amounted to repeating the official target set in March for the world's second largest economy when the new government took office. A top U.S. central banker said the Federal Reserve should keep buying bonds at the current pace until inflation rises back up toward the 2-percent target. The remarks illustrate how divided the Fed is on its quantitative easing program. St. Louis Fed President James Bullard, a voter on policy this year, told reporters the Fed would have to rethink its strategy for reducing asset purchases if inflation, now around 1 percent, drifted lower.

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