Wall Street may take a breather this week after an earnings-driven rally lifted the major U.S. stock indexes to their highest levels in months.

The blue-chip Dow Jones industrial average <.DJI> climbed back above the 9,000 mark last week for the first time since January. And the Standard and Poor's 500 Index <.SPX> ended Friday at 979.26 -- up 44.7 percent from the 12-year closing low hit on March 9 -- after a number of prominent companies' earnings surpassed Wall Street's expectations.

This week's market enjoyed the better-than-expected earnings, or I should say, less bad-than-expected earnings, but we can play the game for only so long, said Scott Marcouiller, senior equity market strategist at Wells Fargo Advisors in St. Louis.

Stay cautious. We can't put a cap on it (the rally) yet, but there will be a correction.

The exuberance was interrupted Friday as disappointing quarterly revenues from Microsoft Corp and Amazon.com hit their stocks and weighed on the Nasdaq, which fell on Friday and halted a 12-day run of gains. In contrast, both the Dow average and the S&P 500 ended Friday at eight-month closing highs.

For the week, the Dow was up 4 percent, the S&P 500 was up 4.1 percent and the Nasdaq was up 4.2 percent.

The earnings blitz will continue this week. About a third of the S&P 500 companies are expected to report results, including such high-profile names as Exxon Mobil Corp and Walt Disney Co Both are also Dow components.

BERNANKE ON THE TUBE

Wall Street and Main Street are likely to tune in when Federal Reserve Chairman Ben Bernanke appears on PBS this week in a town hall-style forum called Bernanke on the Record, hosted by Jim Lehrer.

After being grilled repeatedly on Capitol Hill about the troubles continuing to roil the nation's economy, Bernanke will talk about the Fed's response to last year's economic crisis and its role in economic recovery. The program, which will be recorded on Sunday at the Federal Reserve Bank of Kansas City, will be broadcast on The NewsHour with Jim Lehrer on PBS on Monday, Tuesday and Wednesday; a one-hour special will be aired on or after Wednesday, PBS said.

Investors also will get the first look at second-quarter gross domestic product growth on Friday. New-home sales, consumer confidence and durable goods orders are among other major indicators on tap.

ANOTHER HECTIC EARNINGS WEEK

Investors have thrived during this earnings season by accentuating the positive -- better-than-expected growth in earnings, or the bottom line -- and ignoring the negative -- poor growth in revenue, or the top line.

But investors' euphoric response so far makes it more likely, some analysts said, that the market may take a breather as earnings season grinds on.

We will continue to see stronger-than-expected earnings next week, but the impact on the market would be probably subdued because we have rallied so much, so fast, said John Augustine, chief investment strategist at Fifth Third Asset Management in Cincinnati.

With 184 of the S&P 500 companies having reported earnings through Friday, a total of 77 percent -- or 142 companies -- exceeded earnings forecasts, Thomson Reuters data showed.

In the coming week, 146 companies in the S&P 500 are expected to report earnings, according to Thomson Reuters data. About 12 of the 30 Dow components are set to report.

In addition to earnings due on Thursday from Exxon Mobil and Disney, other major companies set to report results include Valero Energy on Tuesday, ConocoPhillips on Wednesday and Chevron on Friday.

HOME SALES, CONSUMERS AND GDP

The week will kick off with new home sales for June, due on Monday. Economists polled by Reuters predict an annual pace of 350,000 units, up from May's 342,000.

The Conference Board, a private research group, will release its July consumer confidence index on Tuesday. The forecast: 49.0 vs. June's 49.3, the Reuters poll showed.

The Conference Board's consumer confidence index is expected to reflect concerns over job insecurity and falling home values. The Reuters/University of Michigan Surveys of Consumers showed on Friday that U.S. consumer sentiment ebbed in late July to the lowest reading since April on growing pessimism about the long-term economic outlook. Its final July consumer sentiment reading fell to 66.0 from June's 70.8.

Durable goods orders, due on Wednesday, are forecast to have declined in June. But that may be skewed by bankruptcy filings affecting auto production. Initial jobless benefits claims, due on Thursday, are seen rising in the latest week.

The gross domestic product data due on Friday could reinforce the perception that the worst U.S. recession in decades will end in the year's second half. The government's first reading on second-quarter GDP could be the last negative reading, according to some analysts, which would mark the end of the current recession, now in its 19th month.

The forecast, the Reuters poll showed, is for second-quarter GDP to have contracted at an annual rate of 1.5 percent, compared with a contraction in first-quarter GDP at an annual rate of 5.5 percent.

Investors will watch U.S. Treasury yields next week as the government plans to sell a record $115 billion in debt.

(Editing by Jan Paschal)

Ben Bernanke