Home sales data, earnings reports could set mood

Wall Street faces home sales data and more earnings reports this week, as it decides whether growth is strong enough to justify pushing the Dow Jones industrial average back above 14,000.

Although most major companies have been meeting or exceeding Street expectations in their quarterly earnings reports, a few misses and warnings about future performance have rattled investors.

This week, six of the 30 companies that make up the Dow release financial results, as do a slew of home builders. More troubling earnings surprises could give the market a jolt.

Investors will also be closely reading reports on the housing market -- the big weak area of the nation’s economy, which has caused mortgage defaults to rise and which Wall Street fears will curtail consumer spending.

The National Assn. of Realtors on Wednesday reports on existing-home sales. The market believes that 5.85 million homes were resold in June, down from 5.99 million in May, according to the median estimate of economists surveyed as of Friday by Thomson Financial.

On Thursday, the Commerce Department reports on new-home sales. Economists estimate that 890,000 new homes were sold in June, compared with 915,000 in May.

The Dow surpassed the 14,000 mark for the first time last week, only to drop Friday on renewed worries about the tepid housing market’s drag on spending and about lending getting riskier.

The Dow fell 0.4% last week, the Standard & Poor’s 500 index slipped 1.2% and the Nasdaq composite index lost 0.7%.

Also Wednesday, the Federal Reserve releases its so-called “beige book” report, which details economic conditions in various parts of the country.

In addition to new-home sales, the Commerce Department reports Thursday on durable goods. The market predicts that durable goods orders rose 2.0% in June after slumping 2.8% in May.

The Commerce Department on Friday issues its first estimate of second-quarter gross domestic product. Analysts expect GDP growth to register at 3.1%, faster than the first quarter’s 0.7% growth. They expect the report’s “chain deflator,” a measure of inflation, to sink to 3.3% from 4.2%.

Also Friday, the University of Michigan releases its consumer sentiment index. The market forecasts that the July index will show a slight decline compared with June.

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At a glance

Today

Treasury bill auction.

Formal talks between Detroit’s automakers and the United Autoworkers Union on a new national contract are set to begin; the master contract expires in September.

Quarterly earnings reports due from Netflix, Halliburton, American Express, Hasbro and Texas Instruments.

Tuesday

Quarterly earnings reports due from Northrop Grumman, Occidental Petroleum, DuPont, JetBlue Airways, PepsiCo, Amazon.com, AT&T; and McDonald’s.

Wednesday

National Assn. of Realtors reports on existing-home sales for June.

Federal Reserve releases its “beige book” survey of regional economic conditions.

Quarterly earnings reports from IHOP, Apple, DaimlerChrysler, ConocoPhillips, Xerox, Boeing, Tribune, New York Times and Anheuser-Busch.

Thursday

Commerce Department reports on durable goods orders and on new-home sales, both for June.

Labor Department reports on weekly jobless benefit claims.

Freddie Mac reports on mortgage rates.

Quarterly earnings reports due for Amgen, McKesson, Aetna, Bristol-Myers-Squibb, Comcast, Dow Chemical, Ford Motor and Exxon Mobil.

Friday

Commerce Department reports on gross domestic product for the second quarter.

Quarterly earnings reports due from Gemstar-TV Guide International, Chevron, Belo and Clear Channel Communications.

Source: Times staff and wire reports