Updates expected on retail sales, inflation

Wall Street is likely to focus on retail earnings, inflation and other data this week to get a read on whether the economy can stave off recession while slowing enough to prompt the Federal Reserve to eventually lower interest rates.

The market is coming off an erratic week that ended quietly as investors, having digested the election results, turned their attention to economic reports.

The retail quarterly reports -- as well as the Commerce Department’s monthly retail sales data -- will be key because two-thirds of economic activity is driven by consumers. Accordingly, Wall Street will eagerly await holiday forecasts from retailers such as Wal-Mart Stores and Target.

Investors hope the retail sales report as well as a reading of the Labor Department’s producer price index, which measures the wholesale cost of goods, will suggest an economy that is slowing sufficiently to help persuade the Fed to lower short-term rates.

Many investors are anxious to get the latest economic data as they try to determine whether the Fed overreached in its efforts to curb inflation and slowed the economy too quickly.

On tap today are budget data from the Treasury Department. On Tuesday, investors will receive a load of information that includes Commerce Department data on retail sales as well as business inventories.

Also that day, the Labor Department will release the PPI and core PPI, which excludes often-volatile energy and food. The figures are closely watched by inflation-wary investors.

On Thursday, investors can expect the Labor Department’s consumer price index, the key measure of inflation. The core figure, like that of the producer index, excludes food and energy costs.

The week ahead

Today

* Treasury Department reports on October federal budget and holds Treasury bill auction.

* House of Representatives takes up Vietnam trade deal.

Tuesday

* Commerce Department reports on retail sales for October and business inventories for September.

* Labor Department reports on October producer price index.

* President Bush meets with Detroit’s Big Three automakers.

* Quarterly earnings reports due from Home Depot, Saks, Staples, Target, Wal-Mart Stores.

Wednesday

* Senate Health, Education, Labor and Pensions Committee hearing on the Food and Drug Administration and proposals to improve drug safety and innovation.

* Quarterly earnings reports due from Limited Brands, Tyco International.

Thursday

* Labor Department reports on consumer price index for October and weekly jobless claims.

* Federal Reserve reports on October industrial production.

* Freddie Mac reports on mortgage rates.

* Quarterly earnings reports due from Hewlett-Packard, Gap, Barnes & Noble, Dell, Starbucks.

Friday

* Commerce Department reports on October housing starts.

* Bush arrives in Vietnam for Asia-Pacific Economic Cooperation meeting.