Upbeat Reports Could Lift Stocks

Economic reports this week could boost stocks if they suggest the nation’s recovery is still on track. Investors will scrutinize data on new-home sales, durable goods orders and consumer confidence.

New and existing home sales data for July are expected today, while durable goods orders are expected Tuesday.

Durable goods orders, forecast to have risen 1.2% in July, are important to Wall Street because they can indicate the strength of business investments.

Also on the calendar Tuesday is consumer confidence data for August, which are expected to dip to 97.0 from a revised 97.1 the previous month.

And coming Friday is the University of Michigan’s final consumer sentiment index, which is expected to be 88 in August, about the same as August’s 88.1. Both gauges of consumer optimism declined in June and July.

A report from the Commerce Department on Tuesday may show that orders for durable goods rose 1.4% in July after a 4.1% drop in June.

A report coming Friday is expected to show that personal spending probably rose 0.8% in July, the largest gain in five months.

Incomes probably rose 0.3% after rising 0.6% in June, the Commerce Department is expected to report.

“I do think the economy is going to improve, although we may have a [stock] pullback because we always do after substantial rallies,” said Benjamin Pace, who helps oversee $9 billion for Deutsche Bank Private Banking.

But a report Thursday on gross domestic product might reinforce the sluggishness of the recovery so far.

The revised estimate for the second-quarter’s growth rate of 1.1% that is expected would be the same as previously reported and reflect a widening trade deficit and slowing growth in consumer spending.