Wall Street to focus on consumer data
This week on Wall Street will be all about American consumers and whether their spending habits are strong enough to support a steady advance in stocks.
Investors have already had an earful from the Federal Reserve about its stance on inflation, and by now they have a good idea of how companies fared in the fourth quarter.
This week’s data will give investors a clearer snapshot of consumers -- whether they’re optimistic or their buying power has been diminished by some of the more sluggish areas of the economy, such as the listless housing market.
Wall Street is betting on a relatively upbeat reading for the Conference Board’s consumer confidence index, scheduled to be released Tuesday. Analysts were expecting the index to slip only about a point from January’s reading of 110.3, which was the highest in five years.
Investors are a bit more wary, however, about how much money Americans are spending on housing and about the struggling U.S. auto industry.
On Tuesday, the National Assn. of Realtors’ existing-home sales figures are expected to show a slight rise for January, but the market anticipates the Commerce Department’s new-home sales data, to be released Wednesday, will indicate a decline last month.
On Thursday, the market predicts, the Commerce Department will report that personal income and spending grew at a slower pace last month than in December. Also Thursday, automakers are expected to announce that car sales edged a bit lower this month.
Disappointing data could fuel a larger correction in the stock market, which took a hit last week after a higher-than-expected consumer price index and a three-day rally in oil prices sparked worries that inflation could pick up.
Rising prices raise the chance that the Federal Reserve will hike interest rates later this year, a move that could derail the steady upward trend in stocks over the last seven months.
The Dow Jones industrials fell 0.9% last week and the Standard & Poor’s 500 index slid 0.3%, but the Nasdaq composite index managed to climb 0.8%.
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The week ahead
Today
* Treasury bill auction.
* Quarterly earnings reports due from Nordstrom and XM Satellite Radio Holdings.
Tuesday
* Conference Board reports its monthly consumer confidence index.
* Commerce Department reports on durable goods orders for January.
* Quarterly earnings reports due from DreamWorks Animation SKG, Blockbuster, Cablevision Systems, CBS, El Paso Corp., Federated Department Stores, H.J. Heinz, Harrah’s Entertainment, RadioShack, Sirius Satellite Radio, Target, Tenet Healthcare and Wynn Resorts.
Wednesday
* Commerce Department issues a preliminary report on gross domestic product for the fourth quarter of 2006.
* Commerce Department reports on new-home sales for January.
* Quarterly earnings reports due from Gemstar-TV Guide International, Charter Communications, Limited Brands, Martha Stewart Living Omnimedia, Sprint Nextel and Washington Post.
Thursday
* Automakers release their sales figures for February.
* Commerce Department reports on personal income and spending as well as construction spending for January.
* Labor Department reports on weekly jobless claims.
* Freddie Mac reports on mortgage rates.
* Quarterly earnings reports due from Gap, American International Group, Dell, EchoStar Communications, HealthSouth, Staples and Viacom.
Friday
* Fed chief Ben S. Bernanke speaks at Stanford University on globalization and monetary policy.
