1st Earnings Report for 4th Quarter Due
On the economic calendar this week: A report on producer prices will help investors gauge whether companies have been able to raise prices, and Alcoa Inc.’s profit report Tuesday may give a signal of how the battered manufacturing sector is holding up.
Alcoa is the world’s biggest aluminum producer and the first Dow Jones industrial average-listed company to report fourth-quarter profit.
A slew of company announcements that said profits will beat forecasts is encouraging investors. Profit warnings are down sharply from recent quarters, the latest data show.
Investors are nonetheless wary that the fourth-quarter earnings season could bring bad news. Corporate profits still are falling and not expected to rise again until at least the second quarter of 2002, according to Thomson Financial/First Call. And it remains difficult for companies to boost earnings by raising prices while the economy is lagging.
With a relative dearth of economic data and profit reports this week, positive sentiment is expected to pull stocks still higher.
Weekly jobless claims data are expected Thursday. The weekly number, formerly overlooked by most stock investors, has become important in recent months as Wall Street clamors for any signs of an economic recovery.
Last week’s report showed that the number of Americans filing for first-time unemployment benefits rose sharply to 447,000, a sign the labor market remains soft.
Unemployment figures are closely watched because higher unemployment can hurt consumer spending, which makes up about two-thirds of the nation’s economy.
Also scheduled is the producer price index Friday, which signals changes in wholesale prices paid for goods including food and lumber.
Wall Street economists surveyed by Reuters expect prices overall to have slipped 0.2%, following a decline of 0.6% in the previous month.
Still, the core rate, which excludes the volatile food and energy groups, is expected to rise 0.1%, after a gain of 0.2% the previous month.
Reuters
Other economic reports this week:
* Tuesday, Commerce Department report on factory orders for November.
* Tuesday, Federal Reserve report on consumer credit during November.
* Thursday, December sales report by the nation’s top retailing chains.
* Thursday, Labor Department report on imported prices in December.
* Thursday, Commerce Department report on November wholesale inventories.
