3 Things to Watch in the Stock Market This Week

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Stocks rose sharply last week to extend deeper into record territory. Both the Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) added more than 1 percentage point of gains, and the indexes are now higher by about 14% so far this year.

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Third-quarter earnings season kicks off over the next few trading days, with highly anticipated reports set to come out from JPMorgan Chase (NYSE: JPM), Domino's (NYSE: DPZ) and Bank of America (NYSE: BAC). Here's what investors will be looking for in the announcements.

Bank of America

Bank of America, the nation's biggest bank by assets, will post its earnings results before the market opens on Friday. Its last quarterly outing described one of the company's strongest three-month periods in its history, with net income rising 10%, to $5.3 billion, as each of its business lines set new records. Bank of America has given investors several other reasons to bid the stock higher this year, including the fact that its return on assets, a key measure of profitability, has taken a big step toward management's 1% goal.

Like its peers, Bank of America is expected to continue boosting its capital returns as its profitability rises. In fact, the company plans to deliver $17 billion to shareholders over the coming year. With interest rates rising, costs declining, and loan deposits showing healthy growth, the banking giant should be able to hit that aggressive goal.

JPMorgan Chase

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JPMorgan Chase's stock has jumped by double digits in 2017 and could soon pass the $100 per-share mark for the first time. Optimism is rising about the financial-services giant's business, thanks to several positive trends including healthy economic growth, improving credit metrics, and record results out of the commercial-banking business. JPMorgan's operations also stand to benefit if tax reform lowers the corporate tax rate and as the Federal Reserve pushes interest rates higher.

Wall Street is expecting the company to post mixed results before the market opens on Thursday, with revenue holding steady at $25.33 billion as earnings rise, to $1.66 per share from $1.54 per share. Investors will be looking for continued improvements in key operating metrics like book value and return on equity, even as a strengthening balance sheet allows for more generous capital returns through dividends and stock-repurchase spending. They'll be listening for CEO Jamie Dimon's latest reading on the economy, too, given that he described the global expansion three months ago as "stable-to-improving."

Domino's Pizza

Domino's long-term stock rally -- shares have risen 900% in the last decade -- doesn't appear at risk heading into this week's earnings report. After all, consensus estimates call for the pizza-delivery giant to post 10% higher revenue as earnings rise by over 20%, to $1.22 per share.

Those results would continue a solid operating streak for the business so far in 2017. Comparable-store sales soared by 9.5% last quarter, thanks, in part, to a popular digital ordering service that's responsible for over half of its orders. A light business model that focuses on small, easy-to-maintain stores and falling food costs combined to spark a 35% spike in net income over the past six months.

In addition to those headline results, investors this week will be keeping a close eye on the performance of Domino's international stores, since their growth came in shy of management's expectations at the last quarterly update. The international segment is a small part of the business today, but the company has aggressive plans to build it out over the coming years.

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Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.