Analysis By Myles Neligan BBC News Online business reporter

Investors will be looking at UK GDP data

The US earnings season will continue to make all the running in the markets next week, with a string of blue-chip firms including Microsoft, Time Warner, and McDonalds scheduled to turn in results for the three months to September.

Barring a disappointing sales number from computing giant IBM, third quarter results so far have met or exceeded expectations, helping to sustain a six-month long rally in share prices on both sides of the Atlantic.

The FTSE 100 closed at 4,344 on Friday, little changed on the day, but up by about 0.8% from the beginning of the week.

The index has now risen by more than 6% since the start of October.

With this week's corporate results expected to be broadly positive, analysts predict the US and UK stock markets to continue building on their gains.

"The market feels good," said Hilary Cook at Barclays Stockbrokers.

"The corporate newsflow has really improved, and volumes are up sharply. But it's not shoot-your-lights out stuff - it's more one step forward followed by a bit of retrenchment."

Downside

Investor optimism over solid company results and improving economic data has been tempered by worries over the long-term macroeconomic picture.

Chief amongst these is the fear that heavily-indebted consumers will be caught out by rising interest rates as the economy picks up, choking off the nascent recovery.

These concerns were underlined last week by Bank of England governor Mervyn King, who warned in a speech that interest rates would have to rise above their current 48-year low of 3.5% "at some point".

Some analysts also feel the FTSE - which has now risen by nearly a third since mid-March - has already priced in a strong corporate earnings season, and is unlikely to rise much further without a dose of positive economic news.

Others argue that the recent run of good company results reflects tight cost controls rather than increased demand, and therefore cannot be taken as evidence of an economic rebound.

Data check

The Bank of England's interest rate intentions will be back in the spotlight on Wednesday when it publishes the minutes of the Monetary Policy Committee's October meeting.

With many analysts now predicting a quarter point rise in rates before the end of the year, the minutes will be closely scrutinised for any sign of a shift in favour of higher borrowing costs.

Also on the radar will be the first official estimate of UK economic growth in the third quarter, expected to show a slight increase on the 0.6% expansion recorded in the April to June period.