The worries and concerns that have pressured stocks for much of January could dissipate in the coming week, which should bring some resolution to a decidedly irresolute marketplace.
Three major events will shape trading on Wall Street: the election in Iraq, the Federal Reserve’s Open Market Committee meeting and the Labor Department’s job creation report.
The market went into the weekend hoping for a strife-free election in Iraq. Although the results of the election will determine business prospects in the Middle East in the long term, investors were simply hoping that no matter who won, elections could be held without terrorist attacks that would result in heavy loss of life or severe disruptions in oil production.
As for the Fed, it’s expected to raise the nation’s benchmark interest rate by a quarter of a percentage point to 2.5%. But Wall Street will again look closely at the Fed’s accompanying policy statement, hoping the central bank will confirm that inflation remains in check and the economy remains on track.
Wall Street analysts also are hoping for a strong job creation report from the Labor Department. The number of jobs created in November and December was less than economists had expected, showing weakness in the labor market at a time when companies are flush with cash. A rise in job creation would not only help consumers but also show that corporations are confident in the economy.
No matter how the election and economic reports turn out, investors should be able to make solid decisions about their holdings by the end of the week.
Last week the markets eked out slim gains, buoyed by back-to-back up days Tuesday and Wednesday. For most of the week, however, investors ignored earnings and bid stocks lower in anticipation of the coming week’s events.
For the week, the Dow Jones industrial average rose 0.33%, the Standard & Poor’s 500 was up 0.3% and the Nasdaq composite index climbed a meager 0.08%. That reversed a three-week slide for all three indexes.
As the week starts, earnings season is about half over. Good earnings reports have done little to move the market in the last few weeks -- Microsoft Corp.'s strong quarterly report late Thursday is one example -- but as the market’s other uncertainties lift, more attention is likely to be paid to earnings.
From Associated Press
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The Week Ahead
* Commerce Department reports on personal income and spending and on new-home sales for December.
* Quarterly earnings reports due from Exxon Mobil Corp., Kellogg Co., Mattel Inc., Tyson Foods Inc., Visteon Corp., Walt Disney Co. and Wyeth.
* Automakers release sales figures for January.
* Commerce Department reports on construction spending for December.
* Federal Open Market Committee meets to discuss interest rates.
* Quarterly earnings due from Avon Products Inc., Boston Scientific Corp., Georgia-Pacific Corp., Google Inc. HCA Inc., Ingersoll-Rand Co., MGM Mirage, Yum Brands Inc. and Royal Caribbean Cruises Ltd.
* Quarterly earnings to be released by Allstate Corp., Amazon.com Inc., Anheuser-Busch Cos., Boeing Co., CVS Corp., Duke Energy Corp., Harrah’s Entertainment Inc., News Corp. and Northrop Grumman Corp.
* Labor Department reports on productivity and costs for the fourth quarter and on weekly jobless claims.
* Commerce Department reports on factory orders for December.
* Mortgage company Freddie Mac reports on mortgage rates.
* The nation’s largest retailers announce sales figures for January.
* Quarterly earnings to be released by Sherwin-Williams Co., Comcast Corp., Gillette Co., PepsiCo Inc., Raytheon Co., Sprint Corp. and Whirlpool Corp.
* Fed Chairman Alan Greenspan speaks at the Group of 7 conference of industrialized nations in London.
* Labor Department reports on employment for January.
* Quarterly earnings due from Time Warner Inc.