RPT-Wall St Wk Ahead: Healthy earnings outlook may lift stocks

(Repeats column initially transmitted late Friday)

By Cal Mankowski

NEW YORK, June 17 (Reuters) - Signs of an improving economy may have dashed hopes for an interest-rate cut, but the potential for better profits may whet the appetite of stock market investors this week.

If corporations signal that business conditions are looking better for the rest of the year, analysts probably will ratchet up earnings forecasts for the second half.

"Those earnings are going to come in better than we thought, we just don't know by how much," said Carol R. Miller, senior vice president and senior portfolio manager at Federated Investors in Pittsburgh.

The latest data from Reuters Estimates has analysts forecasting a rise of 4.6 percent year-over-year for Standard & Poor's 500 earnings in the third quarter, and 8.4 percent in the fourth quarter.

With the end of the second quarter just two weeks away, earnings may well be on the minds of stock market investors in a week that is very light on economic data.

While stocks have been bouncing back from their recent drubbing, bond yields have remained above 5 percent. Bond yields and bond prices move in the opposite direction.

Bonds were spooked by concerns about inflation heating up, but two reports last week showed core producer prices and core consumer prices behaving well. In fact, the core Consumer Price Index, which excludes volatile food and energy prices, was up by a less-than-expected 0.1 percent in May.