Earnings, Retail Sales & M&A

Good morning. Premarket futures are lower as investors buckle up for what will likely be a difficult earnings season. This morning's weakness is blamed on Wachovia (WB) who reported an unexpected loss and negative comments by a Goldman Sachs strategist who expects stocks to fall further as earnings come out.

On the bright side we have a better than expected retail sales report in March and a little M&A activity as Blockbuster (BBI) made a $1 billion dolalr bid for Circuit City (CC) and reports suggest that NorthWest Airlines (NWA) and Delta (DAL) will ink a merger agreement as early as tomorrow.

Premarket gainers: CC, ANTP, AGIX, DAL, NTRI, ETN, CPST, JASO, GWW, CSIQ, AAI, ETN, VLO, and PRGO.

Premarket losers: WB, BBI, CYMI, ACLS, EMKR, GSIG, CSUN, SONS, QGEN, C, AMAT, RIMM, and AAPL.

Along with a lots of earnings, we have a number of economic reports to this week including today's Business Inventories at 10:AM and key inflation reports on Tuesday with the PPI and Wednesday with the CPI.

With key technicals breaking down on Friday, the market is vulnerable for at least another test of the March lows. The key will be whether investors keep getting more unexpected bad news above and beyond what they already anticipate this week. The combination of this week's inflationary data and earnings will be pivotal.

Let's make it a great week!