Investors look to oil, earnings for guidance
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NEW YORK -- After an extended summer vacation, Wall Street is expected to get back to its normal energetic pace this week with the release of August consumer price and retail sales reports.
Although trading volume on Wall Street will likely be light the first part of the week, as it was for much of the past month, the big economic data including the Commerce Department's retail sales figures and the Labor Department's consumer price index will come at the end of the week, Thursday and Friday respectively. The reports, being released just days before the Federal Reserve's Sept. 20 meeting on interest rates, are likely to awaken traders from their summer doldrums.
In the meantime, investors will get a look at how some of the big brokerages are faring as the economy slows, with reports due from Goldman Sachs Group Inc., Lehman Brothers Holdings Inc. and Morgan Stanley.
The market also will be waiting to see whether more companies issue warnings about third-quarter profits -- Wall Street was rattled last week by warnings from several home builders, all of which noted a precipitous drop in demand.
The Fed left interest rates unchanged at its last meeting but before that raised rates 17 straight times over two years. Many on Wall Street worry that the Fed might have overreached in its quest to contain inflation by throwing too much cold water on the economy.
Another factor in last week's erratic market was a disappointing wage inflation report from the government -- some analysts haven't ruled out a resumption of rate increases by the Fed. The major indexes fell last week despite gains Friday, with the tech-heavy Nasdaq composite index falling 1.25 percent. The Dow Jones industrials slipped 0.63 percent, while the Standard & Poor's 500 index lost 0.92 percent.
Wall Street will also be watching the OPEC meeting in Vienna tomorrow, to see whether if the oil producers decide to adjust output. Oil has fallen from highs in July and dropped below $67 a barrel last week as domestic inventory figures showed increases and as tensions with Iran over its nuclear ambitions eased, at least for the time being.
A lighter-than-expected hurricane season and the end of the summer driving period also helped bring down prices, with light, sweet crude settling at $66.25 a barrel Friday on the New York Mercantile Exchange.
Tomorrow also will see some sobering moments on Wall Street, as the markets observe the fifth anniversary of the Sept. 11, 2001, terror attacks. Traders will mark the occasion with a minute-long silence before the opening bell. Though the Dow has recovered much of what it lost following the attacks, it hasn't closed above 11,000 since June 7, 2001.
ECONOMIC DATA
On Thursday, the Commerce Department is scheduled to release its monthly retail sales report, which many on Wall Street view as an up-to-date snapshot of consumer spending behavior. Then, on Friday, the Labor Department is set to release the consumer price index, the key measure of inflation. Wall Street will be watching this number closely as it tries to determine the Fed's next move.
EARNINGS
Despite a handful of big names, the corporate earnings schedule remains light this week as the third quarter plays out its final weeks. Campbell Soup Co. is expected to report a fiscal fourth-quarter profit of 22 cents per share Monday. It has traded between $28.29 and $38.49 in the past 52 weeks, closing Friday at $37.18.
On Tuesday, retailer Best Buy Co. will perhaps provide insight into whether consumer spending on big-ticket electronic items such as high-definition televisions has continued apace or whether it has slackened as the economy has slowed. Wall Street expects the company to report a fiscal second-quarter profit of 44 cents per share. The stock, which has traded between $40.40 and $59.50 in the past 52 weeks, closed Friday at $46.31.
Goldman Sachs plans to release fiscal third-quarter results Tuesday. Wall Street expects the company to earn $2.97 per share. The stock has traded between $110.23 and $169.31 in the past 52 weeks, closing Friday at $149.80.
Lehman Brothers expects to report its fiscal third-quarter results Wednesday. Analysts expect the company will earn $1.49 per share. The shares have traded between $51.86 and $78.85 in the previous 52 weeks. The stock ended Friday at $66.13.
Morgan Stanley releases its third-quarter results Wednesday and is expected to earn $1.37 per share.
First Published September 10, 2006 12:00 am
