‘Fiscal cliff’ concerns to give way to fears over earnings

Investors’ “fiscal cliff” worries are likely to give way to more fundamental concerns, like earnings, as fourth-quarter reports get under way next week.

Financial results, which begin after the market closes tomorrow with aluminum company Alcoa (AA), are expected to be only slightly better than the third-quarter’s lacklustre results. As a warning sign, analyst current estimates are down sharply from what they were in October.

That could set stocks up for more volatility following a week of sharp gains that put the Standard & Poor’s 500 index on Friday at the highest close since Dec 31, 2007. The index also registered its biggest weekly percentage gain in more than a year.