Earnings reports this morning include some good numbers from Phelps Dodge, Mattel, and Tesoro Petroleum.  Verizon also beat profit estimates by a penny.  Cummins reported earnings below expectations.  On balance, there is nothing to move the overall market, and nothing to change our conclusion that the fourth quarter earnings reports are a modest disappointment.  (Please see this morning's Big Picture column for further explanation.) 

The Financial Times is reporting that Bank of America might buy Countrywide Funding. A French newspaper is reporting that Bristol-Myers may merge with Sanofi-Aventis.  Bowater and Abitibi-Consolidated are merging. Oil is hovering near $55 a barrel.

The focus, however, is on events later this week.  The Fed policy meeting on Wednesday will produce an announcement of no change in rates, but there is some nervousness that the wording will lean more towards a risk of raising rates later this year.  The always important employment report (for January) will be out on Friday.  This week will also bring reports from about 25% more of the S&P 500 companies.

The market is expressing some caution given the heavy news week ahead.  Nasdaq futures are lower, while the S&P futures are flat.  The S&P 500 has leveled off over the past month.  The caution is justified, as there is some risk that the slowdown in earnings growth and concerns about the inflation and interest rate outlook could cause the market to stumble in the weeks ahead. 

 -- Dick Green, Briefing.com