Nasdaq had a better week and was an engine for the market as some good tech earnings rolled in earlier in the week. But it was slammed Friday with a 74 point or 2.6% drop. Nasdaq was down 2.9% for the week but it is up 13% for the year so far. The S&P 500 lost 61 points or 3.9% for the week. Year to date, the S&P is up 5.8%.
Some traders I speak to regularly took the sell off Friday in stride. They blamed the fears about credit and some poor earnings news from companies like Caterpillar. Legendary investor Julian Robertson also told CNBC's Erin Burnett Friday that we are in for a "doozy of a recession." All that created a bad brew for stocks, but traders still saw money willing to come into stocks during the worst of the selling. But they all also see volatility continuing.
"People should stay invested," says CNBC's Larry Kudlow. "The market's going to hang in there and roll through this....People are too pessimistic about the housing market."
After the past week's mixed results, investors will be watching carefully to see if companies are giving a glimpse at the fourth quarter's performance when they release third quarter numbers. On Monday, drug companies Schering-Plough and Merck report before the bell.
Later in the day, American Express , a big bellwether for consumer credit, reports. Tech darling Apple and chip maker Texas Instruments report after the bell that day.
On Tuesday, AT&T, DuPont, Lockheed Martin and Burlington Northern report. We also get numbers from UAL, TD Ameritrade, New York Times , Amazon.com and Whirlpool that day, a really good mix of names from all parts of the economy.
Wednesday is another big day with Merrill Lynch reporting in the morning. Rumors have swirled that Merrill has deeper credit issues than its already reported, but the firm denies that rumor. Boeing also reports Wednesday as does Anheuser-Busch, Conoco Phillips, Amgen and Glaxo SmithKline. Thursday will see reports from Bristol-Myers, Ericsson, Ford and Motorola. Microsoft reports after the bell that day. Countrywide Financial reports on Friday.
Good news from tech companies battled to balance out the bad news from banks in the past week, so I asked CNBC's Silicon Valley Bureau Chief Jim Goldman what he expects when Apple and Microsoft report.
He said Microsoft's report is expected to be good, showing strength from Halo and Vista upgrades. But Apple could be stellar.
"There's almost an -- you don't want to call it this - irrational exuberance but it's getting close when you talk about Apple," he said. "There's a huge amount of optimism that the company will report its first two million unit sales quarter for the Mac."
Goldman says there's a whisper number for Mac sales of 2.2 million. "If they hit the whisper number that represents a sequential 500,000 unit sequential growth. That would be the largest that Apple has ever experienced. The biggest has been 350,000," he said.
Another event in the tech world this coming week will be Google's analyst day on Wednesday.
Oil rocketed this past week, blowing through record after record as the dollar shrunk. Oil jumped $4.91 per barrel this week, or 5.87% to $88.60. But it touched a high just above $90 a barrel in late trading Thursday. (Check Commodities Here).
John Kilduff, senior vice president of MF Global, says the same story will be in place next week and Monday could be a very volatile day when the November crude oil futures contract expires.
"The dollar continues to weaken, which is inflationary for all commodities but especially oil. We have geopolitical concerns stretching from Turkey to Nigeria to Pakistan that all play into crude oil's place as an event risk investment," he said. "Crude oil inventories have plunged since July.
Supply remains tight and we also have the added feature of central governments around the world commenting on their concerns about winter fuel supplies. That is also adding to the bullish sentiment in energy."
"We're expecting yet another up week for energy," said Kilduff, a CNBC contributor. "For Monday, the potential exists for some outsized volatility and likely a repeat of the surge we saw in the expiration of the October futures contract, when it got close to $84."
As expected, the G-7 did not take on the dollar's fall in its communiqué, but Paulson in comments Friday night told reporters that he supports a strong dollar that is determined by economic fundamentals and markets.
Guess the dollar must be reflecting economic fundamentals as it falls day after day against the euro. It lost 0.8 percent this week to a level of $1.4297 per euro. For the year, it has declined 7.7 percent against the euro and 3.7 percent against the yen.
"The markets believe the U.S. is going to slow more than Europe. If that's the case, if our Fed eases and the European Central Bank stands pat, it's dollar unfriendly," says CNBC's Rick Santelli.