Oil Prices Expected to Weigh on Market

Soaring crude prices plus worries about the economy and the outlook for earnings are expected to hang over the stock market this week during the depths of the summer doldrums.

U.S. oil prices topped $46 a barrel Friday. They have set new highs every trading session except one in August and showed little sign of ending a steady climb that began in June.

Investors will get more clues about inflation and the economy when three key indicators for July are released Tuesday: the consumer price index, housing starts and industrial production and capacity utilization.

If the data meet expectations, that might suggest improvement and break up the gloom brought on by oil, said Richard Suttmeier, chief market strategist at Joseph Stevens & Co.

“The key is getting through this soft patch, which obviously is caused by crude oil and what I’ll call politics,” he said.

The overall CPI is expected to be up 0.1% in July, after a 0.3% gain in June, and the core CPI, excluding volatile food and energy costs, is forecast to gain 0.2%, according to analysts surveyed by Reuters.

In June, the core CPI was up 0.1%.

Industrial production is forecast to reverse a decline and rise 0.5% in July, and plant utilization is expected to gain 0.3 point to 77.5%, a Reuters poll of economists showed.

Housing starts in July should rise to a seasonally adjusted annual rate of 1.900 million units after dropping in June to a rate of 1.802 million units.

Cautious comments by the chief executive of Cisco Systems Inc. and profit warnings from other technology companies, including Hewlett-Packard Co., unsettled investors last week.

Companies slated to release earnings this week include Home Depot Inc., the world’s leading home improvement retailer and one of the 30 stocks in the Dow average.

From Reuters

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This Week’s Datebook

Today

* Treasury bill auction.

* Lowe’s Cos. and Sysco Corp. report quarterly earnings.

Tuesday

* Labor Department reports on consumer price index for July.

* Commerce Department reports on housing starts for July.

* Federal Reserve reports on industrial production for July.

* Too Inc., Applied Materials Inc., BJ’s Wholesale Club Inc., Borders Group Inc., Deere & Co., Estee Lauder Cos., Home Depot Inc., J.C. Penney Corp., Saks Inc. and Staples Inc. are scheduled to report quarterly earnings.

Wednesday

* Ross Stores Inc. reports second-quarter earnings.

Thursday

* Labor Department reports on weekly jobless claims.

* Freddie Mac, the mortgage company, reports on mortgage rates.

* The Conference Board releases its index of leading economic indicators for July.

* Barnes & Noble Inc., Foot Locker Inc., Gap Inc., Limited Brands Inc. and Nordstrom Inc. are scheduled to report quarterly earnings.

From Associated Press