3 Things to Watch in the Stock Market This Week

By Demitrios Kalogeropoulos Markets Fool.com

Stocks rallied by 3% last week as theDow Jones Industrial Average(DJINDICES: ^DJI) and S&P 500 (SNPINDEX: ^GSPC)indexes pushed into double-digit gains for 2016:

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^SPX data by YCharts.

The week ahead could involve big moves for shareholders of Pier 1 Imports (NYSE: PIR), Oracle (NYSE: ORCL), and Carnival (NYSE: CCL), as their stocks are set to post quarterly earnings announcements over the next few trading days.

Pier 1 Imports' holiday forecast

Pier 1 shares are up 40% in the past month as investors found reasons to feel optimistic heading into Wednesday's earnings release. In a mid-quarter update, CEO Alex Smith and his executive team raised their sales and profit outlooks thanks to improving traffic trends. "Our merchandise, promotional and marketing initiatives are resonating well with our customers," Smith said in November. "We now expect our fiscal third-quarter results to be at the high-end of our previously guided ranges for comparable and net sales, merchandise margin, earnings per share and adjusted earnings per share."

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Image source: Pier 1 Imports.

Pier 1 should post just a slight decline in comparable-store sales, which will still mark an improvement over the prior quarter's 3% drop. Profitability is also on track to rise as the retailer scales back on its promotions. Besides those encouraging trends, investors will want to hear confidence from management that the recent momentum will carry through the holiday season. That's why Pier 1's updated full-year guidance will be in focus this week.

Oracle's cloud services

Oracle will post its quarterly earnings after the market closes on Thursday. The stock has held flat over the last three months following the software titan's mixed second-quarter results. Oracle missed analyst expectations on both the top and bottom lines, but a 61% spike in cloud services helped offset declining hardware spending to nudge overall sales up by 3%.

Look for CEO Safra Catz to highlight these growth businesses this week. Oracle projects that gross margin in its software-as-a-service and platform-as-a-service offerings will rise to 62% on the way to management's long-term target of 80%. The company recently unveiled its second-generation infrastructure-as-a-service offering that aims to mount more of a challenge to AmazonWeb Services. Investors will be watching for signs that Oracle can dominate the highly competitive cloud services segment while still generating solid profit growth.

Carnival's booking trends

Carnival will likely have plenty of good news for investors when it posts its results on Friday morning. After hitting a record in the fiscal third quarter, sales should rise by 6%, according to consensus estimates, as earnings improve to $0.58 per share from $0.50 per share last year.

Image source: Getty Images.

The cruise ship operator is enjoying a favorable balance between supply and demand for its vacation packages, which is giving Carnival plenty of room to boost profitability. In fact, management in late September said that bookings for the first half of 2017 are "ahead of prior year at considerably higher prices." These trends have already produced a 20% spike in operating income over the past nine months, which has translated into a 50% improvement in bottom line earnings. "We delivered the strongest quarterly earnings in our company's history," CEO Arnold Donald said in September, "affirming our ongoing efforts to expand consumer demand in excess of measured capacity increases and leverage our industry leading scale."

Executives forecast a 3% uptick in net revenue yields and a smaller 1% increase in net cruise costs for the fourth quarter, which would preserve its healthy profitability momentum. But the stock's post-earnings trading will likely revolve around what Carnival says about booking trends for the coming fiscal year and how plans to boost capacity will impact its profits going forward.

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Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon.com. The Motley Fool owns shares of Oracle. The Motley Fool recommends Carnival. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.