It's make or break time for corporate profits, with dozens of companies—from Facebook to Ford— reporting in the week ahead. The pressure is on for those earnings to support the market's current valuations, after weeks of choppy trading. It's also crunch time to see whether it really was the harsh winter weather that slowed profit growth—and the economy—or something else. "Does spring make a difference? And in what industries does it make a difference? If that doesn't come across, it may raise some confusion about what the economic data is telling us," said Art Cashin, director of floor operations at UBS. About 150 S&P 500 companies are scheduled to release quarterly results through Friday, in an earnings season that has been so far mediocre, though nearly two-thirds of companies are beating Wall Street estimates. On the economic front, there is housing data with existing home sales Tuesday and new home sales Wednesday, and durable goods are reported Thursday. Developments in Ukraine will also be watched, after signs of progress Thursday. Diplomats negotiating in Geneva announced an agreement to refrain from violence on all sides, disarm militants and release seized buildings. Corporate profits though will be the key test for a stock market that ended the past week higher, after a violent shakeout in high flying biotech and tech momentum names. Nasdaq, down the prior three weeks, ended the week more than 1 percent higher at 4095, after coming to the brink of correction territory with a total 9.7 percent decline by Tuesday. The Dow, off slightly Friday, was up 2.4 percent for the week at 16,408, and the S&P 500 ended the four-day trading week up 2.7 percent, at 1864. "If earnings are there, the market should be able to rally through it," said Jack Ablin, CIO of BMO Private Bank. "If we can get through earnings season, we can focus on the economy and that should be good news. I think the economy is going to grow faster than some people think." But traders have been concerned earnings are not there, profit growth is sluggish and the concern is that some of the weakness is not merely explained away by the winter weather impact. Some high profile earnings misses include Google, IBM and J.P. Morgan. Dupont was one of those blaming its earnings miss in part on weather, as farmers delayed planting in the first quarter. But it expects some agricultural sales to be made up in the second quarter, as weather improves. "There's still a gap between the expectations in stock prices and where we currently are (with earnings)…I guess we have to pay the price of last year's gains," Ablin said. The S&P 500 was up about 30 percent last year, and as of Thursday, the S&P 500 was up just 0.9 percent for 2014. Ablin also pointed to Thursday's lack of gains in stocks even though there were a lot of earnings beats. "To me that's emblematic of a market that's fully priced with a lot of expectations priced in. I do think we're getting a rotation to tangible value. We're on that side of the canoe right now," he said. He is watching McDonald's earnings for what it says about the global economy, and the momentum names will also be important since their still lofty valuations are in doubt. Netflix reports Monday, Gilead reports Tuesday,Facebook and Zynga report Wednesday, and Amazon.com reports Thursday. Some analysts believe the hot corner of the market has corrected. "As far as the correction is concerned, I think we're halfway through with the Dow and the S&P. As far as the Nasdaq is concerned, I think we're finished with the correction there," said Peter Cardillo, chief market economist at Rockwell Global Capital.
