Wall Street Awaits Retail, Earnings Reports
Heading into the heart of earnings season this week, the expected results look robust.
But possible slowing of future profit growth and the effect of surging oil prices on the economy could conspire to hold down stocks.
And views on two more presidential debates, one last Friday after markets closed and the other coming up Wednesday, remain for investors to digest after they mostly shrugged off the first.
“People are trying to figure out what this dog race is going to turn into,” said Scott Lynch, managing director of U.S. trading at CSFB.
Government reports due at the end of the week are expected to show that retail sales for September gained 0.7%, adding 0.3% in the non-automotive sector, while the producer price index probably rose 0.1% in the month.
Industrial production probably gained 0.3%, with capacity edging up to 77.4%.
As for the corporate earnings set to be released, “the third quarter is old news” already, said Elliot Spar, options market strategist with brokerage and investment bank Ryan Beck & Co.
“”The negative economic impact of $50-plus oil and decelerating earnings will be the headwinds that will keep the market capped on the upside.”
Investors will look to government data on oil supplies this week for clues about future prices for a barrel of oil, which surged to a record close of $53.31 on Friday in New York.
Earnings growth is forecast to have peaked in the second quarter at 16.9% for companies that make up the S&P; 500 index and is anticipated to slow dramatically in 2005.
Year-over-year quarterly growth may be higher in the fourth quarter than the third, but that rate is likely to tumble to single digits in 2005, according to Reuters Estimates.
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This Week’s Datebook
Monday
* Columbus Day. Stock markets are open. The bond market is closed.
Tuesday
* Third-quarter earnings released by Gannett Co., Johnson & Johnson and Yahoo Inc.
Wednesday
* Harley-Davidson Inc. releases third-quarter earnings.
* Apple Computer Inc. releases fourth-quarter earnings.
Thursday
* Commerce Department reports on international trade for August.
* Labor Department reports on weekly jobless claims.
* Freddie Mac reports on mortgage rates.
* Sun Microsystems Inc. releases fiscal first-quarter earnings.
* Third-quarter earnings released by Abbott Laboratories, Bank of America Corp., Citigroup Inc., General Motors Corp., Nokia Corp., Southwest Airlines Co. and UnitedHealth Group Inc.
Friday
* Labor Department reports on producer price index for September.
* Commerce Department reports on retail sales for September.
* Federal Reserve reports on industrial production for September.
* Commerce Department reports on business inventories for August.
* Wachovia Corp. releases third-quarter earnings.
