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Sharemarket bulls are betting strong second-quarter profits will send equities even higher with the reporting season in full swing this week.
Rising energy and food prices coupled with uneven retail sales are not likely to slow down investors as they test the market's limits. At the same time, the financial sector is expected to avoid major losses from the subprime sector.
After a week when the Dow Jones industrial average and Standard & Poor's 500 index reached record highs on mergers and acquisitions activity and multibillion-dollar blue-chip buyback plans, investors will eye profits, inflation data and the Federal Reserve for signs of further good news.
Earnings will be headlined by Microsoft, Intel, Citigroup and Bank of America among an exhaustive list of major companies.
Amid the results, Federal Reserve chairman Ben Bernanke will give two days of six-monthly testimony on US monetary policy before Congress.
"Earnings are not going to be a problem," said Michael Metz, chief investment strategist at Oppenheimer & Co in New York.
"The speculators are very excited. Unless it is a major surprise, the external [factors] won't matter.
"I don't think Ben Bernanke has anything new to say at the moment about inflation, and the Federal Reserve does not think the subprime problem will derail growth," Metz added.
On Friday, the Dow Jones Industrial Average ended at a record 13,907.25, while the Standard & Poor's 500 Index set a lifetime high at 1555.10 and ended at 1552.50, also a record.
For the week, the blue-chip Dow average rose 2.2 per cent, the S&P 500 added 1.4 per cent and the Nasdaq Composite Index gained 1.5 per cent.
Investors may be holding their breath, however, when it comes to the financial sector to see if it regains its footing in the wake of the subprime credit markets' turmoil.
Last week, Standard & Poor's and rival ratings agency Moody's Investors Service downgraded billions of dollars of bonds in the increasingly unsteady subprime sector.
- REUTERS