After last week’s losses, investors seek new data

After the debacle the stock market suffered last week, it’s hard to know what earnings or economic data being released this week might actually comfort Wall Street.

As the market tries to recover from its worst week in nearly five years, investors will be looking at profit reports from such heavyweights as General Motors Corp., Procter & Gamble Co. and Verizon Communications Inc.

In Asia, shares slid this morning after U.S. stocks suffered a second day of heavy losses last week on worries that companies were facing tighter credit conditions, and uncertainty in global equity markets drove up the yen.

“With U.S. markets continuing to fall, the outlook does not look good today,” said Choo Hee-yeop, deputy general manager of asset management strategy at Korea Investment & Securities.

Morgan Stanley Capital International’s index of Asia-Pacific stocks excluding Japan fell 0.4%, while the Nikkei 225 average fell more than 1% to hit its lowest in four months. Key indexes in Hong Kong, Australia and South Korea were all little changed to slightly weaker.

Political uncertainty added to pressure on Japanese shares after Prime Minister Shinzo Abe’s government suffered a crushing defeat in Japan’s upper house elections on Sunday.

The stock market will also get a read on U.S. consumers Tuesday, when the Commerce Department reports on personal income and spending.

According to the median estimate of economists surveyed Friday by Thomson Financial, June personal income is expected to rise 0.5%, up from a 0.4% gain in May, while spending is expected to edge up 0.2%, less than May’s increase of 0.5%.

Tuesday’s report will also include the government’s reading on core personal consumption expenditures, one of the Federal Reserve’s preferred gauges of inflation.

June’s core personal consumption report is projected to show a 2% year-over-year rise -- up from 1.9% a month earlier, and at the very top of the Fed’s comfort zone of 1% to 2%.

Wall Street’s inflation worries have taken a back seat to concerns about credit, but could reemerge if the consumption figure is higher than expected.

Wall Street, uncertain whether the rise in sub-prime mortgage defaults is a trend that’s leaching into other types of loans, could find some solace in solid employment figures, because people with steady paychecks are less likely to shirk debt.

On Friday, the Labor Department releases its monthly employment data. Economists forecast that July nonfarm payrolls will rise by 133,000, a bit more than in June, but that the jobless rate will edge up to 4.6% in July compared with 4.5% in June.

The Dow tumbled 4.23% last week; the Standard & Poor’s 500 index dropped 4.66%; and the Nasdaq composite index fell 4.9%. The Russell 2,000 index fell 7.01%, and is now down 1.25% for the year.

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At a glance

Today

Treasury bill auction.

Quarterly earnings reports due from Archer Daniels Midland, Humana, Tyson Foods and Verizon Communications.

Tuesday

Conference Board reports its monthly consumer confidence index.

Labor Department reports on employment cost index for the second quarter of 2007.

Commerce Department reports on personal income and spending and on construction spending, both for June.

Quarterly earnings reports due from DreamWorks Animation SKG, CBS, General Motors, MetLife, Northwest Airlines, Waste Management and Whole Foods Market.

Wednesday

Automakers release their sales figures for July.

The Institute for Supply Management issues its report on activity in the manufacturing economy for July.

Quarterly earnings reports due from Electronic Arts, Walt Disney, Kraft Foods, Master Card, Starbucks, Time Warner and Wynn Resorts.

Thursday

Commerce Department reports on factory orders for June.

Labor Department reports on weekly jobless claims.

Freddie Mac reports on mortgage rates.

Quarterly earnings reports due from Gateway, Eastman Kodak, Newmont Mining and Viacom.

Friday

Labor Department reports on employment for July.

The Institute for Supply Management issues its report on activity in the non-manufacturing economy for July.

Quarterly earnings reports due from Procter & Gamble, Washington Post and Weyerhaeuser.

Source: Times staff and wire reports