Earnings Warnings, Economic Data Expected

Wall Street walks a tightrope this week as investors focus on Tuesday’s Fed meeting while deciphering economic tea leaves and bracing for more corporate warnings.

The earnings warning season this week moves into high gear as many companies announce that their third-quarter earnings will land shy of analysts’ consensus estimates.

Analysts expect third-quarter earnings at companies in the Standard & Poor’s 500 to rise 8.5% from the year-ago period, according to market researcher Thomson First Call. That’s down from expectations of 10.9% growth just one week ago.

Meanwhile, Wall Street will seek more cues on where the economy is headed from this week’s hefty helping of reports.

Two measures of consumer confidence to be released this week are expected to show that sentiment flagged in September.

An index from the Conference Board on Tuesday probably will show a drop to 92.4 from 93.5 in August. A University of Michigan index, for release Friday, probably will fall to 86 from 87.6, analysts predict.

Wall Street gets two reports on the housing sector midweek: Wednesday’s existing-homes figures for August, seen edging up 5.4 million from 5.33 million, and Thursday’s new-home sales for last month, seen falling to 981,000 from 1.017 million.

Durable-goods orders, another important report, for August will be released Thursday and were seen falling 2.6%, from a rise of 9.2% in July.

Friday’s final reading on economic growth as measured by gross domestic product is expected to show a rise of 1.2% compared with a preliminary reading of 1.1%.