Leading Indicators Index to Be Posted

The week starts off with a roar today, with the closely watched index of leading U.S. economic indicators for April due out. Analysts expect to see it rise for the first time in three months, fueled by higher consumer confidence and stock prices.

The Conference Board’s gauge of how the economy will perform over the next three to six months may rise as much as 0.1%, according to economists, after falling 0.2% in March and 0.5% in February. The leading indicators haven’t increased more than 0.1% since the end of last year, evidence the economy is struggling to accelerate.

But the week then slows on the economic news front.

On Tuesday, the Treasury Department will report on the April budget surplus, and it is expected to be the smallest in nearly a decade because a sluggish economy has damped tax receipts.

On Thursday, the Labor Department will issue its weekly report on jobless claims, and the number is expected to rise by 3,000, to 420,000. More than half a million job losses in the last three months may give consumers pause. That would mark the 14th straight week of claims in excess of 400,000, which some economists say signals a deteriorating labor market.

Meanwhile, blue chips in the spotlight this week include computer maker Hewlett-Packard Co. and retailer Home Depot Inc., both of which report quarterly earnings on Tuesday.

Other big chains will be reporting as well, including retailers Gap Inc. and Toys R Us Corp., Home Depot rival Lowe’s Cos. and office supply giant Staples Inc.

Analysts will pay close attention to any outlook from retailers about consumer spending, which drives two-thirds of the economy. But most do not expect stellar results after Target Corp. and Wal-Mart Stores Inc. reported weak sales earlier this week, citing the Iraq war and poor consumer confidence.

“We could see some more profit taking as retailers release somewhat tepid results, since the quarter included bad winter weather and the CNN effect,” said Tim Ghriskey of Ghriskey Capital Partners, a money manager in Bedford Hills, N.Y. “The CNN effect” refers to consumers who stayed home to watch coverage of the war in Iraq instead of going out and spending.

Market watchers are not likely to attach much importance to this week’s economic numbers.

Going forward, investors will give far more weight to the economic data, which will paint a clearer picture of the economy without war’s distortion, said Milton Ezrati, senior economist and strategist at Lord Abbett & Co.

“We’re looking for postwar information and have gotten very little of it so far,” Ezrati said.

A quick overview of the week ahead:

Monday: Conference Board reports index of leading economic indicators for April. Lowe’s, Nordstrom, Longs Drug Stores and Toys R Us issue quarterly reports.

Tuesday: House Financial Services Committee takes up bankruptcy reform; Senate Commerce Committee holds hearing on executive compensation; Hewlett-Packard, Home Depot, Staples and high-end apparel retailer Saks Inc. issue quarterly reports.

Wednesday: Federal Reserve Chairman Alan Greenspan testifies before Joint Economic Committee; Senate Commerce Committee holds hearing on spam e-mail.

Thursday: Labor Department reports on weekly jobless claims; mortgage company Freddie Mac reports on mortgage rates; Senate Commerce Committee holds hearings on media ownership; House Financial Services subcommittee holds hearing on hedge funds. Among others, Barnes & Noble, Footlocker Inc., Gap and Williams-Sonoma issue quarterly reports