If stocks break out to new highs, analysts say it's likely to be earnings news that will take them there — even though some reports have been pretty discouraging.
The is perched just at the psychological 2,100 level. It rose 0.3 percent Tuesday and hung close to that throughout the trading day. The Dow, meanwhile, regaining 18,000 Monday, closed above it again Tuesday at 18,053.
Oil could also be a factor Wednesday. After rallying Tuesday on Kuwait's oil worker strike, West Texas Intermediate futures slipped late in the day on the announcement of a surprise build in the latest American Petroleum Institute report. It fell further after reports that the strike was settled.
U.S. inventory data is reported at 10:30 a.m. EDT Wednesday, and the May WTI futures contract expires at the close. The May contract ended the day at $41.08 per barrel.
Illinois Tool Works, a closely watched industrial, and Coca-Cola, a multinational consumer bellwether, both report before the bell Wednesday morning. Abbott Labs, St. Jude Medical, U.S. Bancorp, Canadian Pacific Railway and EMC also report before the market open, while American Express, Qualcomm, F5 Networks, Mattel, Yum Brands and Stryker report after the close.
Some earnings so far have been big disappointments. Netflix tumbled nearly 13 percent on its subscriber guidance, while IBM fell more than 5 percent Tuesday after reporting disappointing revenues and guidance Monday.
Intel, reporting after Tuesday's bell, was trading more than 2 percent lower in after-hours trading.
"I was a big believer, and I continue to be, that this earnings season is going to be extremely positive for the market," said Jonathan Golub, RBC Capital Markets chief U.S. market strategist. "This was expected to be a horrific earnings season. We thought it was going to come in weak." But Golub said he also expects to see a shift in investor views about earnings this quarter, as the "earnings recession" troughs.
Earnings for the S&P 500 are expected to be down 7.6 percent in the first quarter, based on actual reports and estimates, according to Thomson Reuters. Excluding the energy sector, earnings growth is down 2.3 percent. So far, 72 percent of companies have beaten earnings per share forecasts.
"This week and next week in terms of earnings, you're going to have a strong picture globally and domestically, and that's going to be compelling for the market.
If we hear from many of the reports that CFOs and CEOs are seeing a pickup in demand for their goods or their services, you can see how it helps the entire sector or subsector they're in, and that will help guide the market higher," said Quincy Krosby, market strategist, Prudential Financial.
The S&P 500 reached its all-time high of 2,134 last May.
"It's a market that wants to move higher and has wanted to move higher," she said. "When we reach these technical levels, you want to see follow-through. You always want to see follow-through. It may take a couple of days … and the catalyst will be what is the guidance coming from companies."