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July 24, 2007 > Wall Street eyes home sales reports amid onslaught of earnings

Wall Street eyes home sales reports amid onslaught of earnings

By Madlen Read, AP Business Writer

NEW YORK (AP), Jul 20 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 homebuilders. 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 Association of Realtors on Wednesday reports on existing home sales. The market anticipates 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 forecast that 890,000 new homes were sold in June, compared to 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 lending getting riskier.

The Dow fell 0.40 percent last week; the Standard & Poor's 500 index dipped 1.19 percent; and the Nasdaq composite index lost 0.72 percent.

THE EARNINGS FLOOD CONTINUES ...

On Monday, American Express Co. is expected to report a profit of 86 cents a share. The credit card company closed at $64.51 Friday, at the upper end of its 52-week range of $49.73 to $65.89.

Also Monday, analysts forecast a profit of 72 cents a share from Merck & Co. The drug maker closed at $49.02 Friday, in the upper half of its 52-week range of $37.05 to $55.14.

AT&T releases its quarterly earnings Tuesday. AT&T, expected to report a profit of 67 cents a share, closed at $39.06 Friday, at the upper end of its 52-week range of $27.24 to $41.93.

On Wednesday, analysts predict Boeing Co. will post a profit of $1.16 per share. The plane manufacturer hit a new 52-week high of $104.42 Friday and closed at $103.86.

ExxonMobil Corp. on Thursday is expected to report earnings of $1.94 per share. The oil company closed at $91.94 Friday, at the upper end of its 52-week range of $63.87 to $92.74.

... AND ECONOMIC DATA KEEPS POURING IN

Also Wednesday, the Federal Reserve releases its Beige Book, which details economic conditions in various parts of the country.

In addition to new home sales, Commerce Department reports Thursday on durable goods. The market predicts that durable goods orders rose 2.0 percent in June after slumping 2.8 percent 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 percent, faster than the first quarter's 0.7 percent growth, and the report's ``chain deflator,'' a measure of inflation, to dip to 3.3 percent from 4.2 percent.

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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