August 29, 2006 > Wall Street preps for more economic data
Wall Street preps for more economic data
by Joe Bel Bruno, AP Business Writer
NEW YORK (AP), Aug 25 _ Wall Street will finally get the data it has craved to help get a better handle on the economy and whether it has pulled back further than policy-makers wanted.
In the next five days, some two dozen economic reports will be released _ including consumer confidence, job growth and manufacturing figures. Investors might even get a better clue about what Federal Reserve Chairman Ben Bernanke thinks of interest rates when minutes from the last Fed meeting are released.
These readings might help give Wall Street the guidance it has been clamoring for, especially after last week's lackluster performance. But the real question is, how many people will be around to trade on the news _ this is, after all, the last week of August.
``I looked up the word doldrums in the dictionary, and there's no coincidence it comes from the word dull,'' David Darst, chief investment strategist of Morgan Stanley's global wealth management group, said Friday. ``You might see some kind of fluctuation next week with these reports, but people will come back to work after Labor Day and sort through everything that's gone on. That's when you'll see volume go up.''
Indeed, this past week's volume was lethargic, and traders say expect to see more of the same in the coming days. Looking back to last August, the NYSE reported consolidated volume for the month of 43.33 billion _ while it popped up to 46.37 billion in September and 51.37 billion in October.
Last week, the Dow ended down 0.86 percent, Nasdaq fell 1.09 percent, and the S&P 500 dropped 0.55 percent.
Stocks fell on concerns that the Fed might have gone too far by raising rates 17 straight times before pausing at its August meeting. While this means Bernanke is unlikely to initiate another hike, it also troubles Wall Street that the economy might have moderated too quickly.
The biggest fear is that consumer spending is eroding, and that could translate into lower corporate profits. Oil prices, which rose steadily last week, also are a major contributor to how much people spend.
On Tuesday, investors hope to get some clues as the direction of consumer spending from the Conference Board's August consumer confidence index, and analysts are calling for a modest decline. The Federal Reserve minutes also comes out that day.
On Wednesday, Wall Street will be reading the preliminary second-quarter gross domestic product numbers with interest to see if personal spending has slowed, and how business investment and government spending fared.
Consumers will also be in focus Wednesday, when the Commerce Department releases its personal income and personal spending reports for July. Also that day, the department will release its factory orders report for last month.
Perhaps the most important report this week comes out Friday, when the Labor Department releases its nonfarm payroll data for August. In July, the report showed slowing momentum and volatility in payroll growth, which is expected to continue.
The pace of business spending will also be measured on Friday when the Institute for Supply Management releases its survey of activity in the manufacturing sector, covering new orders, production, employment and inventories.
Wall Street will have to get most of its direction from economic data since there is little in the way of corporate earnings reports. On Wednesday, TiVo Inc. kicks off the week with its second-quarter results, which are expected to come in at a 14 cent per share loss. It has traded between $4.56 and $9.49 over the past 52 weeks, closing Friday up 17 cents, or 2.2 percent, at $7.85.
On Thursday, tax preparation company H&R Block Inc. is expected to report a loss of 19 cents per share. It has traded between $19.80 and $27.94 over the past 52 weeks, closing Friday down $1.98, or 8.7 percent, at $20.81.
Also Thursday, food company H.J. Heinz Co. reports its results. Heinz closed up Friday 5 cents at $41.35, and has traded within a 52-week range of $33.35 and $44.15.
And luxury jeweler Tiffany & Co., reports, giving an inkling of how the well-heeled consumer is holding up. Shares were unchanged Friday at $30.80, near the bottom of its 52-week range of $29.63 and $43.80.