As great as 2012 has been for stocks, there are still some negatives to ponder.



NEW YORK (TheStreet) -- Eight weeks into 2012, the S&P 500 is batting .875, it's cool to be bullish, and the G20 is reportedly putting together a $2 trillion rescue plan to solve Europe's debt crisis once and for all.

That's a scenario that would have seemed almost unfathomable back in early October when the market scraped its near-term lows.

And yet, there are still some negatives to keep in mind. This has been a low-volume rally for the major U.S. equity indices, indicating a possible lack of deep-seated conviction in the so-called risk-on trade.

According to Deutsche Bank, trading in the S&P 500 components is down 20% from last year.

This is also reflected in the ongoing popularity of bonds. Last week, long-term mutual funds investing in bonds saw inflows of $8.2 billion, while funds investing in equities saw inflows of just $1 billion with just $35 million of that going into funds investing in U.S. stocks.

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The economic data are getting better, but there is still some trepidation out there about what a recession in Europe means for the progress that has been made stateside in the last six months. Don't forget rising energy costs either. They hit the all-important consumer in the wallet immediately. Gas prices at $4 per gallon and the Dow at 13,000 may not mix.

So corporate earnings this past reporting season must have been great, right? Well, not really. FactSet Research said Friday that the blended earnings growth rate for the fourth quarter sits at a pedestrian 5.9%, with 454 of the S&P 500's components having opening their books. Take out Apple(:AAPL) and AIG(:AIG), and the rate drops to 1.1%.

And while analysts are bullish that strength in the U.S. and emerging-market economies in the second half will stoke earnings growth toward the end of 2012, the present isn't exactly boom times.

According to FactSet, analysts are projecting a year-over-year decline in earnings of 0.4% in the current quarter with the second and third quarters pegged for single-digit percentage growth of 6.8% and 4.4%, respectively. Not exactly the kind of growth that justifies new all-time highs for the major averages.

The machine is supposed to kick in the fourth quarter of 2012 with growth expected to jump up to 15.7% to be followed by 14.8% in the first quarter of 2013, but those kind of numbers would in part be a product of the mediocrity afoot right now. Those projections also assume that everything works out in Europe over the next year, by no means a sure thing.

Just some food for thought: 2012 has barely seen any profit-taking, but there isn't much precedent for stocks skipping higher indefinitely. And because the rally has been on such low volume, the pullback could be the opposite and strike with stunning ferocity.

As for Monday's scheduled news, Lowe's(:LOW) is reporting its fiscal fourth-quarter results before the opening bell, and the average estimate of analysts polled by Thomson Reuters is for a profit of 24 cents a share in the December-ended period on revenue of $11.34 billion.

Last week, Home Depot(:HD) reported much better-than-anticipated earnings, boosting expectations for rival Lowe's, whose shares are up 7% since the start of 2012 but just 4% going back a full year. The 52-week high for Lowe's stock of $28.46 came on Feb. 21 in the wake of Home Depot's 6%-plus upside surprise.

Friday's close at $27.16 has Lowe's stock trading at a forward price-to-earnings ratio of 15.2 vs. 14.5 for Home Depot, which also is the winner from the standpoint of forward annual dividend yield, which is 2.5% vs. 2.1% for Lowe's.

The sell side is split on Lowe's ahead of the report, with 15 of the 29 analysts covering the company at hold (13) or underperform (2), and the median 12-month price target sitting at $29.

Check out TheStreet's quote page for Lowe's for year-to-date share performance, analyst ratings, earnings estimates and much more.

Investors will also be choosing a new price for Priceline.com(:PCLN) following its quarterly report. The consensus is calling for earnings of $5.05 a share from the online travel services company on revenue of $967.9 million.

Priceline.com shares have been on a roll since the start of the year, gaining nearly 27% and hitting a 52-week high of $595.84 on Friday, so there is some pressure on the company to deliver its eighth straight beat.

Most of Wall Street sees the stock running higher from here, with 18 of the 23 analysts covering the shares at either strong buy (5) or buy (13), and the 12-month median price target at $627.50, implying potential upside of more than 6% from Friday's close at $590.41.

The stock's forward price-to-earnings ratio of 20 compares to 10.4 for Expedia(:EXPE) and 19.2 for TripAdvisor(:TRIP).

Check out TheStreet's quote page for Priceline.com for year-to-date share performance, analyst ratings, earnings estimates and much more.

Other early reporters on Monday include AES Corp.(:AES), Calgon Carbon(:CCC), Cooper Tire & Rubber(:CTB), Savient Pharmaceuticals(:SVNT), Trex(:TREX),Visteon(:VC) and Warner Chilcott(:WCRX).

The late show features AGCO(:AG), Career Education(:CECO), Chemtura(:CHMT), Cray(:CRAY), Human Genome Sciences(:HGSI), Jazz Pharmaceuticals(:JAZZ), Rosetta Stone(:RST), SINA Corp.(:SINA), Sotheby's Holdings(:BID), VIVUS(:VVUS) and Zagg(:ZAGG).

Monday's economic calendar is light, with only pending home sales for January at 10 a.m. EST. The consensus estimate is for an increase of 1%, according to Briefing.com, which itself is looking for a dip of 0.5%.

Also front and center in Monday's headlines will be Transocean(:RIG), which moved up its earnings report on Friday to the surprise of some analysts; and Berkshire Hathaway(:BRK.B), which reported its earnings on Saturday.

Warren Buffett said in his annual letter to shareholders that Berkshire's board has selected his successor as CEO, and Buffett himself expressed confidence in Todd Combs and Ted Weschler, but the name of Berkshire's next chief wasn't revealed.

"Your Board is equally enthusiastic about my successor as CEO, an individual to whom they have had a great deal of exposure and whose managerial and human qualities they admire. (We have two superb back-up candidates as well.)," the letter reads. "When a transfer of responsibility is required, it will be seamless, and Berkshire's prospects will remain bright."

Check out TheStreet's quote page for Berkshire Hathaway for year-to-date share performance, analyst ratings, earnings estimates and much more.

-- Written by Michael Baron in New York.



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