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October 3, 2006 > Wall Street looks toward economic data

Wall Street looks toward economic data

by Tim Paradis

NEW YORK (AP), Sep 29 _ Investors still glowing from the Dow Jones industrial average's reach toward new highs last week will be looking for signs in the coming week of whether the market's run-up will continue.

With the quarter's end so recent, investors won't be able to rely on much in the way of corporate earnings news, but rather will be looking for any companies that might issue profit forecasts and to economic news.

Perhaps the most critical report of the week will be Friday's employment report from the Labor Department. Investors will be anxiously awaiting the government's jobs creation figure.

September's robust stock performance was based in part on investors' notion that while the economy is slowing, it is not necessarily headed for a recession. The Federal Reserve's decision to leave short-term interest rates unchanged for a second straight time last month signaled to some that the central bank had perhaps ended a two year run of 17 straight increases. The prospect of cheaper access to capital is not only welcome for business but also perhaps for would-be home buyers. There has been widespread concern that the economy would stumble if the housing market were to cool too quickly.

Although the markets ended lower Friday after four days of gains, the stock market showed its strongest third-quarter performance in nine years. During trading Thursday, the Dow briefly topped its closing record from of 11,722.98 set in January 2000. Although the end of the quarter often brings window-dressing as institutional investors try to polish their numbers for the period, many market observers remain upbeat about the market's longer-term prospects.

``In the short-term it's maybe a little ahead of itself,'' Mark Minervini, president of Minervini Private Access, said of the markets and the Dow's upward march. However, he remains bullish on the markets over all and sees the Dow's attention-grabbing gains as good for investor sentiment.

``There are a lot of stocks that have strong fundamentals that have not really advanced much in this rally. We think those stocks left behind with good fundamentals are going to play catch-up.''

Last week, the Dow rose 1.49 percent, the Standard & Poor's 500 index, which remains near a 5 1/2-year high, gained 1.60 percent and the Nasdaq advanced 1.78 percent.

ECONOMIC DATA

On Monday, the Commerce Department is scheduled to provide the latest insight into the housing sector with a report on construction spending.

On Tuesday, Wall Street will get a snapshot of the auto industry, as domestic and foreign manufacturers release their September sales figures. As with a cooling housing market, the automotive sector has kept Wall Street guessing about what fallout there could be from Detroit's struggles to stanch its enormous losses in part by slashing jobs.

Wednesday brings two speeches from Fed officials and another Commerce Department report, this time on factory orders. Fed Chairman Ben Bernanke is slated to speak on savings before the Economics Club of Washington. His speech could be overshadowed, however, by that of Vice Chairman Donald Kohn, who is to speak at New York University that evening on the outlook for the economy.

The Commerce Department's data will reflect nondurable goods orders. Last week, the agency disappointed investors with a report that orders to U.S. factories for large manufactured _ or durable _ goods fell for a second straight month in August, the first time in more than two years there has been a consecutive decline.

On Friday, the Labor Department issues its employment data, including the number of jobs created, average hourly earnings and the unemployment rate. The jobs creation figure is of particular concern, as it indicates how much the economy is growing or contracting.

EARNINGS

With a light earnings schedule, investors will have to wait until Thursday for results from sizable companies. Due that day is a report from Constellation Brands Inc. Investors expect the wine and spirits maker's second-quarter profit will total 43 cents a share. The company, which has traded between $21.15 and $28.97 during the past 52 weeks, closed at $28.78 Friday.

Hotel chain Marriott International also weighs in, with its fiscal third-quarter results. Analysts are looking for a profit of 30 cents a share. The stock, which closed Friday at $38.64, has traded between $29.01 and $39.74 in the past 52 weeks.

Expected to round out Thursday, and the week's earnings, is a fiscal fourth-quarter report from Vail Resorts Inc., whose properties include the Vail, Keystone and Breckenridge ski areas. Wall Street expects the company, which will soon head into its peak time of year, will post a loss of 80 cents a share for its fourth quarter. The stock, which has traded between $27.71 and $41.55 for the past 52 weeks, closed Friday at $40.02.

 
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