STOCKS EXPECTED TO EXTEND RALLY THIS WEEK, BE READY

NEW YORK--U.S. stocks should extend their rally this week, taking the Dow to fresh records, as long as corporate earnings keep topping expectations and beat back concerns that equities have gotten a tad pricey recently.
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This week, which is smack in the middle of the third-quarter earnings reporting period, the Federal Reserve's monetary policy committee meets and is expected to leave interest rates unchanged again, making the two-day meeting a likely nonevent for stocks.

Investors will need to be cautious of huge, index-moving, swings like those of the shares of heavy equipment maker Caterpillar Inc. (NYSE:CAT - News), which sorely disappointed investors with a smaller-than-expected profit and a poor outlook, and easily held the Dow in negative territory in Friday trading.

A flood of earnings reports is expected. Companies due to report include American Express Co. (NYSE:AXP - News), AT&T Inc. (NYSE:T - News), Ford Motor Co. (NYSE:F - News), Halliburton Co. (NYSE:HAL - News), Kimberly-Clark Corp. (NYSE:KMB - News), Texas Instruments Inc. (NYSE:TXN - News), Kraft Foods Inc. (NYSE:KFT - News) and Exxon Mobil Corp. (NYSE:XOM - News).

"I think the fundamental earnings figures that are going to come out are going to be positive enough to keep us inching forward," said Brett Gallagher, deputy chief investment officer with Julius Baer in New York.

Third-quarter earnings for Standard & Poor's 500 companies are on pace to rise close to 15 percent from a year ago, according to Reuters Estimates. That would be the 17th straight quarter of double-digit profit growth for U.S. companies.

"As long as we have a combination of solid earnings, a market-friendly Fed and no geopolitical trepidation, gains in stocks may still continue," said Andre Bakhos, president of Princeton Financial Group in Princeton, New Jersey.

The Fed is expected to leave interest rates unchanged at its policy-setting committee meeting Oct 24-25.

THIS IS GOING TO BE A BIG WEEK! GET READY.