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At the start of each week, VFC's Stock House examines some news items, stocks and stories that made headlines during the previous week, and may also be positioned make headlines or influence trends during the upcoming week as well.

Investors liked what they saw last week from the major jobs reports, even though the overall unemployment number ticked modestly higher, and stocks surged yet again, allowing the DOW to breach - and then hold - the 14,000 mark. Other economic data released during the week and a "status quo" approach by the Fed urged investors to shrug off a fourth quarter GDP pullback and continue the buying that allowed the January rally of 2013 to continue. This week, though, a pivot point should be met where investors decide whether to keep charging with the buying momentum or start banking some profits, given the sharp rise in stocks since the fiscal cliff deal was announced at the dawn of the new year. There's little doubt that the U.S. economy has undertaken a solid recovery over the past couple of years, but the debate will rage as to whether or not the economy is on sound enough footing to justify the setting of new market highs.

On first glance, there's the argument that the markets are forward looking, and although the economy may not be at a point right now that justifies new record highs in the stock markets, that point may come in the not-so-distant future. Additionally, given the transparency seen today in the strength of the recovery, when compared to the false bubble of nearly five years ago, investors are apt to be more comfortable with continued buying now than they were at any other point in the last half decade.

That said, there may still be enough potential hiccups on the horizon to convince other investors to take an opposing view and start taking some profits off the table - with the intention of building up a cash stockpile to use in the event of a pullback. For supporting arguments to this theory, look no further than Europe, where although the media hasn't paid much attention to the economies over there of late, there's still plenty to be concerned about looking forward. Some major economies - such as Germany's and the U.K.'s - are still fighting stagnating growth and the threat of recession, while others - such as Spain, Greece and Portugal - are still struggling to find stability as a number of austerity measures continue to be put into effect in an attempt to streamline budgets and qualify for bailouts.

On this side of the pond, the coast is not entirely clear either. The U.S. economy, too, is heavily reliant on government spending right now, as evidenced by the drop GDP retraction last quarter that was blamed on a significant drop in defense spending. A truly healthy economy shouldn't have to rely so much on government spending that responsible cutbacks would threaten to stall growth - and since it's all but an eventuality that Washington is soon enough going to have to move forward with some notable spending cuts to reel in what many consider to be out-of-control federal spending, many investors will be looking for evidence that such a move would not again stutter the GDP numbers before riding the markets to sustained record highs.

For the time being, indications are that the economy - although on the road to recovery - is still relying heavily on the stimulus measures that were put into place to halt the slide and guide us through to a full recovery, as evidenced by the Fed standing pat last week.

There are still those ready to go "all in" now, however, and those investors likely believe that the markets are close to reaching full recovery mode over the next couple of quarters. With that said, there's sure to be a more conservative group of investors who do not believe we are quite over the that hump just yet, and it's those investors that may feel it's worth realizing some paper gains now in order to wait for a pullback. Since I'm always a fan of turning at least some paper gains into realized ones after nice rallies, that's the most attractive strategy to take, in my opinion, especially given the fact that there are always a individual stocks to play in the meantime, whether the markets are hitting record highs or not.

With market sentiment still high and with strong auto sales, manufacturing and consumer sentiment numbers accompanying the encouraging jobs reports last week, it's likely that the markets will push their record highs this week, especially if popular earnings reports continue to beat. The highs probably won't be sustained, in my opinion, at least not yet - although we could sleep easy that the darkest days are behind us, unless you're a Mets fan assessing this year's outfield situation.

Although the march towards record market highs will be the main story to watch this week, here are a few other individual stocks and stories to keep an eye on for the week of 4 February, 2013 ...

Earnings: With earnings season about at the halfway mark, there's still a fair share of high-profile reports coming up. As mentioned above, a continued positive trend in these reports combined with the already-seen encouraging economic indicators should help launch the markets to new record highs. Whether they stay there or not is another story, but any pullback will not likely be blamed on earnings reports moving forward, since the trend has already been set for the quarter.

One of the hotter reports this week will be from Yum! Brands (NYSE:YUM), whose share price has traded with high volatility since December when reports of tainted chicken started making waves in China. A significant chunk of YUM's earnings revenue originates in China, so any weakness over there has a tendency to drop the share price in a hurry. Already the company had warned of slowing growth in China, so the possibilities of even slower sales due to the chicken fiasco sent some investors scrambling and the share price towards sixty. YUM rebounded slightly as worries of a drawn out dilemma ceded, but investors will be using Monday's report to gauge just how serious the company was - and may still be - hit by the crisis.

Expectations have it that the company will return a bump on an earnings per share basis when compared to the same quarter of the previous year, while revenues are expected to be nearly identical. McDonald's (NYSE:MCD) earnings numbers showed somewhat of a slowdown in China growth, too, already setting the stage for YUM's report. As previously discussed, the Chinese chicken ordeal is likely closer to an end than the beginning, so any weakness in share price this week based on YUM earnings could be a time to add for investors with an eye towards the future. YUM's report beat estimates last quarter and any surprises this quarter would likely lead to a quick rebound in share price. One to keep an eye on as a potential add for the long term or retirement portfolio.

The Walt Disney Co. (NYSE:DIS) reports this week, too, and shares have been steadily moving higher over the past months. Disney made some noise late last year when the company announced that it had purchased the Star Wars franchise from LucasFilm and indicated an intent to launch Episodes 7 as early as 2015, with Episodes 8 and 9 to follow later. Given the strength of Disney's portfolio of properties, including the robust Marvel studios and the LucasFilm acquisition, DIS looks to be in a strong position moving forward and the stock is another that could be considered for the long term or retirement portfolio, in my opinion. DIS is not one that is likely to move the markets by itself, but guidance may dictate whether its individual rally will continue or if some profit taking will set in. Still a nice 'buy the dips' play with eyes towards the long haul.

Other relevant reports to watch this week are Gilead Sciences (NASDAQ:GILD), SiriusXM (NASDAQ:SIRI), Cummins Inc. (NYSE:CMI) and Visa (NYSE:V). Gilead was up by three percent on Friday, has been on a tear for months, and is expected by many to guide higher. Any sign of strength should keep GILD on a roll. Always one of the most talked about stocks out there, SIRI has been able to sustain prices of well over three bucks while testing new highs leading into this week's earnings report. Sirius has hugely benefited from a very significant rebound in the auto industry and that shouldn't change much during the coming quarters, either, as the economic recovery continues to pick up steam. Investors will also be keying in on comments regarding debt and the direction that Liberty Media (NASDAQ:LMCA) plans on taking the company, since a green light by the FCC earlier this year allowed the company to take majority control of SIRI. Cummins is one to watch for further evidence of strength in the industry sector while Visa offers insight into consumer spending. Both have been on the rise of late, especially V, given the strength of the recovery.

Healthcare, Biotech, Pharmaceutical:

Amarin On The Rebound

After hitting prices of below seven bucks last week, shares of Amarin Corporation (NASDAQ:AMRN) quickly rebounded and may be in store to continue that trend this week as another month will bring with it renewed speculation as to whether or not investors will hear definitive word from the FDA on Vascepa's New Chemical Entity (NCE) status. As discussed, a positive decision on NCE is likely to fuel additional takeover or partnership speculation as it would provide prospective buyers with the certainty of extended coverage. Amarin has argued in the past, however, that NCE is a relative non-factor, considering the strength of the patent portfolio that has been - and is still being - built around Vascepa.

Last week the company boosted that portfolio with the announcement of two additional patents, but at this point investors are concerned about NCE and the commercial launch that was underway late last month. It's possible that AMRN could trend higher and surpass the ten dollar mark on pure speculation at this point, but unless NCE is granted and buyout talk makes rounds again, shorts will most likely feel that there is no rush to cover. Should Vascepa start raking in even a fraction of its previously-discussed potential, then the current share price will likely be looked back upon as a bargain.

For those with eyes a few quarters down the road, AMRN remains a nice, methodical 'buy the dips' play, but those looking for the potential of one of the above-mentioned shorter term catalysts to play out may like the accumulation point at near eight bucks. Still one to watch.

TrovaGene's Pullback Could Mark An Accumulation Point

Having traded off its recent highs, TrovaGene Inc (NASDAQ:TROV) will be a stock to watch this week as a bout of profit taking has brought forward a period of consolidation that may have investors who might have missed the most recent taking a look at buying in on the pullback. TrovaGene has developed a pipeline of diagnostics that are able to detect certain cancer types through simple urine samples. With a string of demonstrated developmental successes realized, investors may remain interested in the TROV story as numerous milestones are still pending for the current quarter, including the commercialization of two of its diagnostic products. Additional launches are also slated to take place over the coming quarters, too, according to information contained on the company's website. Also key, the company has signed a few key collaborative efforts over the past couple of months which helps to validate the technology moving forward and has also drawn the attention of analysts.

Volume has been inching higher of late, a sign that new interest is coming in, but it's also quite obvious that some profit taking has set in after the quick move higher. As mentioned above, that has led to a period of consolidation that may have the stock positioned to attract a new round of investor interest as the numerous catalysts of 2013 begin to play out. It's also a plus that the company sits on a solid cash position at the current time, partly due to a cash-raising event in December, according to financial statements posted on the company website.

Roundup: Just as quickly as the headlines appeared on Monday morning that European stocks were well on the rise, a new round of headlines hit noting a political crisis in Spain that sent the markets heading lower, along with the valuation of the euro. Such news could impact U.S. trading, given the early indicators that the markets will open flat in America, but the strength of last week's economic numbers should keep the markets from retreating too much right now, if at all. No one wants crisis or scandal in Europe these days as the zone attempts to gain stable footing and grow its respective economies, but the news of a deflating euro will most likely be celebrated by most economists over there, nonetheless, who were growing nervous that its recent rise would start becoming a significant burden on exports.

The lower rate will also help out those who may have been looking to bank a nice European vacation over the coming months, but the rate is still much higher than it was just a couple of months ago. Monday's headlines indicate that the European could start coming to the forefront now, especially since - as mentioned in the opener - the media has been shying away from such headlines of late, but I'd expect to see the US markets to continue testing record highs before pulling back on the profit taking that is likely to materialize.

Congrats to all the Ravens fans out there - many of whom were likely sporting Redskins jerseys earlier this season as RGIII stormed the scene - and to the Niners fans, too, as that was one heck of a game. Now, it's time for pitchers and catchers to report ... and for those watching games in Citi this summer, we'll still be waiting for our outfield to report.

Disclosure: I am long AMRN, MCD, YUM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Weekly Stock Watch, Week Of 4 February 2013