Print

Mail

wiki links

Wall Street set for an onslaught of data

Despite Wall Street's expectations of yet another round of impressive quarterly earnings, this week's onslaught of data could leave the market right back where it started -- or ultimately lower.

The first-quarter earnings season was to kick into full swing yesterday, and several key economic reports -- including two inflation assessments -- are due from the government.

Companies are once again expected to post double-digit profit growth for the first three months of the year. However, some analysts fear this may be the last solid quarter for a while as the impact of rising interest rates and energy costs is felt.

Even if first-quarter earnings meet or beat estimates, disappointing outlooks for the coming periods could make investors wary.

Last Thursday, General Electric Co left its forecast for this year unchanged; its stock tumbled 1.6 percent and continued falling in after-hours trading.

Meanwhile, the question remains, how much higher will the US Federal Reserve lift interest rates as it continues battling inflation. Disappointing reports on wholesale and consumer inflation will likely send investors running for cover. On the other hand, stabilizing prices could energize the market following its recent decline.

Without much news last week to give investors confidence in stocks, the lingering uncertainty over earnings and the economy's health left stocks drifting.

The Dow gained 0.16 percent, the S&P 500 lost 0.49 percent and the NASDAQ slipped 0.55 percent in a holiday-shortened week.

Although investors may get sidetracked by earnings, critical data on inflation and home building will feed Wall Street's obsession with interest rates.

The Department of Commerce will today report data on the number of housing starts and building permits issued last month.

Economists are expecting hous-ing starts to retreat by 75,000 to 2.05 million and building permits to fall by 99,000 to 2.08 million -- a sign that the housing market is indeed slowing in response to higher mortgage rates.

Also today, the Department of Labor releases its monthly producer price index (PPI), which tracks prices paid by wholesalers and is often seen as a precursor to inflation at the consumer level.

The PPI is forecast to edge up 0.4 percent after tumbling 1.4 percent in February; core PPI, which excludes food and energy prices, is seen rising 0.2 percent after adding 0.3 percent in the prior month.

The department's reading of its consumer price index tomorrow is expected to show a gain of 0.4 percent, up from a slight 0.1 percent rise last month. Core CPI is seen adding 0.1 percent.

Nearly half of the Dow industrials report their results this week. Analysts have said the lack of profit warnings in recent weeks means results stand to match or beat Wall Street's lofty expectations.

The Dow components reporting next week include financial services firm Citigroup Inc, drugmaker Pfizer Inc, automaker General Motors Corp, soft-drink producer Coca-Cola Co and computer maker IBM Inc.

Tech investors will be closely watching results from Yahoo Inc for a read on the health of the online advertising industry.

When the company reports after the closing bell today, analysts predict its profit will drop to US$0.11 per share from US$0.13 a year earlier. Yahoo is about 29 percent below a 52-week high of US$43.66 in early January, finishing on Thursday up US$0.03 at US$31.13.

Surging demand for its popular iPod media player should help Apple Computer Inc, which posts its report tomorrow afternoon.

Analysts expect Apple's profit to climb to US$0.43 per share from US$0.35 a year ago. Its stock is down 23 percent from a mid-January high of US$86.40; on Thursday, shares fell US$0.24 to US$66.47.
This story has been viewed 1220 times.