A slew of widely followed companies will announce earnings in the weeks ahead, setting the market's tone for the rest of 2007. By Jeffrey R. Kosnett, Senior Editor July 11, 2007 The U.S. stock market has performed handsomely so far in 2007. Its broadest measure, the Wilshire 5000 Index, is up 7.8% year-to-date through July 11 and represents a total market value of $19 trillion. That means U.S. stocks have gained $1.3 trillion in value this year, which is far better than pessimists expected.For more perspective, consider this: Practically everyone with a pension, an IRA, a 401(k) or a variable annuity has a large stake in the performance of the broad stock market. Relatively few of us invest in risky collateralized mortgage obligations, leveraged mortgage real estate trusts and shares of subprime lenders. So, we'll gladly take the stock market's first-half gains with thanks and approach earnings season with tranquility. Note I said "tranquility." That's not giddiness or smugness. It's not trepidation, either. It's a fair reflection of some current surveys of sentiment among investment professionals. For example, 12 Wall Street and regional brokerage strategists see Standard & Poor's 500-stock closing the year, on average, at 1580. The S&P closed at 1519 on July 11, so that would be a 4% gain from here. Managers polled quarterly by Russell Investment Group seem a bit more restrained. This poll has been consistently bullish for a few years, but this time only 25 of 353 respondents think stocks will gain 5% or more in the third quarter. Almost one-fourth of the group expects a down quarter. If enough managers recast portfolios to protect their first-half gains, their forecasts will turn out to be a self-fulfilling prophecy. Advertisement But are losses a foregone conclusion? No. Business is good, foreign earnings still turn into fat dollar profits, and bonds and real estate are more expensive relative to their yields than stocks are to earnings. No law prevents all major categories of U.S. securities from staging a simultaneous slowdown, but if bonds and real estate continue to struggle, stocks become a tad more attractive by default. For the market to continue to rise requires, at the very least, that the most influential companies report decent results. There hasn't been a single day during the past year in which the Wilshire 5000 moved up or down as much as 2%, and that's largely because the majority of the most widely held companies, including nearly all the Dow Jones industrials, have kept up or beaten expectations. The risk to the stock market over the next few weeks will be what happens if some of these companies issue poor earnings news or warn about future problems. Watch for these key names and the dates on which they will announce results: General Electric (symbol GE, $38.20), July 13. GE is up 5% in 2007 and 14% over the past year, performance that's not good enough for CEO Jeff Immelt. He (or his press-release writer) seems to accompany every announcement of another acquisition or asset sale with a barb about what he considers the depressed stock price. Advertisement Six months ago, Immelt issued a wonderfully encouraging business outlook for 2007, calling for growth of close to 20% in enough of the company's product areas, and 10% to 15% growth on the whole. Yet investors just yawned. If GE's results are again good and the stock still doesn't pop, maybe nothing the company can say or do will rev up the shares except a break-up. That wouldn't be good for business, the employees or the world economy, but what other choices would GE have? Johnson & Johnson (JNJ, $62.86), July 17. Beaten-down health giants such as Bristol-Myers Squibb and Merck and solid performers such as Abbott Labs are enjoying a good year. By contrast, shares of J&J, which has a reputation as being one of the best company's on the planet, are down 5% so far in '07. J&J raised dividends 11% this year and announced a massive share buyback, but blowout earnings would help more. J&J's product prospects for the rest of the year seem unexciting. But if the company comes up with tangible reasons for optimism, the shares could bounce nicely -- and help the rest of the health-care sector. Harley-Davidson (HOG, $61.42), July 19. It's not in the Dow industrials, but Harley has symbolic value because its sales are a window on luxury and lifestyle spending. Secondarily, its performance addresses the question of whether foreigners with super-strong euros and other currencies will snap up U.S. brands at what to them are bargain prices. The stock's fall this year from about $74 to $60 isn't an accurate reflection of the company's operations or prospects -- business was hurt by a winter strike. If Harley reports good news for the most recent period, shares of other high-end consumer companies may benefit. Corn Products (CPO, $44.08), July 24. This corn-starch and sweeteners company (also not in the Dow) has been on a roll, both in its business and on the stock market, because of sky-high corn prices, tight supplies and enormous world demand for what it sells. As a result, analysts keep setting higher earnings targets: The average estimate for this quarter is for earnings to leap 67% over the same quarter a year ago. Given that the stock has risen 28% this year and 44% over the past 12 months, and that Corn Products sharply raised its earnings "guidance" in April, it better make the target. If not, the stock will sink and provide more fuel for pessimists who would come up with a list of a dozen other Johnny-come-lately growth stocks with vulnerable share prices. Advertisement 3M (MMM, $87.88), July 26. Analysts have set a moderate bar here: They see earnings growing 11% in the second quarter. With 60% of sales outside the U.S., the weak dollar is a big help, so there's no reason to think 3M will have any problems. Rather, if it surprises to the upside, it may validate the theory that U.S. industrials are healthy, competitive and still excellent investments. MMM shares are up 14% since April, yet the stock still trades at a moderate price-to-earnings ratio of 15. There's a lot of potential here -- and as 6% of the quirky, price-weighted Dow Jones industrial average, 3M carries a lot of weight. Cheer for a rousing earnings report.