Investors await data on inflation, earnings
Wall Street will be awaiting fresh data on inflation and corporate earnings in the coming week as it looks to ride its fourth-quarter gains through the end of the year.
Recent findings indicating that inflation remains in check have lent support to the markets and, along with strong corporate profits, have helped drive stocks higher.
This week brings data on inflation at the wholesale level and should give further insight into whether the Federal Reserve’s plan to usher the economy toward a gentle slowdown is working.
The central bank has left short-term interest rates unchanged at its last four meetings, most recently, last Tuesday. The Fed has said it remains concerned about inflation and would be unlikely to deliver an interest rate cut until it deems inflation is contained.
Investors will be examining figures on manufacturing. Last week, industrial production showed an uptick in November after two months of declines. The findings raised hopes that manufacturing, and the overall economy, had found stability.
A number of important profit reports are due in the coming week, including ones from Morgan Stanley, Circuit City Stores and FedEx. Stronger-than-expected profit reports from investment banks and other companies helped propel stocks higher last week.
The Dow Jones industrial average rose 1.1% last week, while the Standard & Poor’s 500 index advanced 1.2% and the Nasdaq composite index gained 0.8%.
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The week ahead
Today
* Treasury bill auction.
* Quarterly earnings reports due from Oracle and Hovnanian Enterprises.
Tuesday
* Labor Department reports on producer price index for November.
* Commerce Department reports on housing starts for November.
* Quarterly earnings reports due from Palm, Circuit City Stores and Morgan Stanley.
Wednesday
* Quarterly earnings reports due from FedEx and Nike.
Thursday
* Conference Board reports its monthly leading economic indicators index for November.
* Commerce Department reports on the nation’s gross domestic product for the third quarter of 2006.
* Labor Department reports on weekly jobless claims.
* Quarterly earnings reports due from American Greetings, Carnival, ConAgra Foods, General Mills, Red Hat and Rite Aid.
Friday
* Commerce Department reports on durable goods orders, personal income and spending for November.
* Quarterly earnings report due from Walgreen.
