Economic, earnings data may set tone for 2007
Investors will begin the second week of the year hoping for more clarity about the direction of the economy, and in turn, the markets, after Wall Street’s lackluster start to 2007.
A steady feed of economic data and a trickle of big earnings reports this week might help the market find balance and pick a direction.
Last week, Wall Street saw big shifts in momentum, rising first on news of strength in manufacturing but stumbling amid concerns that the Federal Reserve might raise interest rates and not lower them, as some analysts had started to forecast.
Investors often like to talk about the early days of January setting a tone for the year, so it’s understandable if some are feeling discouraged after last week’s mixed performance.
The Dow Jones industrial average fell 0.5% and the Standard & Poor’s 500 index fell 0.6%, while the Nasdaq composite index added 0.8%.
Investors have been trying to square their desire for the economy to slow with their hope that it will not cool too quickly and risk spinning into recession.
Alcoa kicks off the quarterly earnings season when it reports fourth-quarter results Tuesday. Many analysts and economists view the aluminum company as an indicator of the pace of U.S. manufacturing.
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The week ahead
Today
* Treasury bill auction.
* Federal Reserve reports on consumer credit for November.
* 2007 International Consumer Electronics Show in Las Vegas runs through Thursday.
Tuesday
* Quarterly earnings reports due from Alcoa and Supervalu.
Wednesday
* House considers legislation that would raise the minimum wage.
* Commerce Department reports on international trade for November.
* Quarterly earnings report due from Genentech.
Thursday
* Senate Budget Committee holds hearing on long-term U.S. budget outlook.
* Senate Finance Committee hearing examines prescription drug pricing.
* House considers legislation that would expand stem cell research.
* Labor Department reports on weekly jobless claims.
* Treasury reports on federal budget for December.
* Freddie Mac reports on mortgage rates.
Friday
* House considers legislation on prescription drug pricing.
* Commerce Department reports on retail sales for December and business inventories for November.
