Data on Construction, Employment Expected
Investors still glowing from the Dow Jones industrial average’s reach toward new highs last week will be looking for signs in the coming week of whether the market’s run-up will continue.
With the quarter’s end so recent, investors won’t be able to rely on much in the way of corporate earnings news but rather will be looking to economic news and to any companies that might issue profit forecasts.
Perhaps the most crucial report of the week will be Friday’s employment report from the Labor Department. Investors will be anxiously awaiting the government’s job creation figure.
September’s robust stock performance was based in part on investors’ notion that although the economy is slowing, it is not necessarily headed for a recession.
The Federal Reserve’s decision to leave short-term interest rates unchanged for a second straight time last month signaled to some that the central bank might have ended a two-year run of 17 consecutive increases.
The prospect of cheaper access to capital is welcome not only for business but also for would-be home buyers.
Although the markets ended lower Friday after four days of gains, the stock market showed its strongest third-quarter performance in nine years.
Although the end of the quarter often brings window-dressing as institutional investors try to polish their numbers for the period, many market observers remain upbeat about the market’s longer-term prospects.
“In the short term, it’s maybe a little ahead of itself,” Mark Minervini, president of Minervini Private Access, said of the markets and the Dow’s upward march. However, he remains bullish on the markets overall and sees the Dow’s attention-grabbing gains as good for investor sentiment.
“There are a lot of stocks that have strong fundamentals that have not really advanced much in this rally. We think those stocks left behind with good fundamentals are going to play catch-up.”
Last week, the Dow rose 1.5%, the Standard & Poor’s 500 index, which remains near a 5 1/2 -year high, gained 1.6% and the Nasdaq advanced 1.8%.
The Commerce Department is scheduled today to provide the latest insight into the housing sector with a report on construction spending.
On Tuesday, Wall Street will get a snapshot of the auto industry, as domestic and foreign manufacturers release their September sales figures.
On Thursday, the nation’s big retailers will report on September sales.
On Friday, the Labor Department issues its employment data, including the number of jobs created, average hourly earnings and the unemployment rate. The job creation figure is of particular concern, as it indicates how much the economy is growing or contracting.
From the Associated Press
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The Week Ahead
Today
* Commerce Department reports on construction spending for August.
* Treasury bill auction
Tuesday
* Automakers release sales figures for September.
* Federal Communications Commission resumes hearings in Los Angeles on rules limiting concentration in ownership of broadcast licenses.
Wednesday
* Commerce Department reports on factory orders for August.
* Federal Reserve Chairman Ben S. Bernanke speaks at the Economics Club of Washington.
Thursday
* Labor Department reports on weekly jobless claims.
* Freddie Mac reports on mortgage rates.
* The nation’s largest retailers announce their sales figures for September.
* Quarterly earnings report due from Marriott International.
Friday
* Labor Department reports on employment for September.
* Federal Reserve reports on consumer credit for August.
