Wall Street will be awaiting fresh data on inflation and corporate earnings in the coming week as it looks to ride its fourth-quarter gains through the end of the year.
Recent findings indicating inflation remains in check have lent support to the markets and, along with strong corporate profits, has helped drive stocks higher.
This week brings data on inflation at the wholesale level and should give further insight into whether the Federal Reserve’s plan to usher the economy toward a gentle slowdown is working. The central bank has left short-term interest rates unchanged at its last four meetings — most recently, last Tuesday — after raising them 17 straight times since 2004. The Fed has said it remains concerned about inflation and would therefor be unlikely to deliver the interest rate cut Wall Street has hungered for until it deems inflation is contained.
Investors will be examining figures on manufacturing. Last week, industrial production showed an uptick in November after two months of declines. The findings raised hopes that manufacturing, and the overall economy, had found a level of stability.
A number of important profit reports are due in the coming week, including ones from Morgan Stanley, Circuit City Stores Inc. and FedEx Corp. Stronger-than-expected profit reports from investment banks and other companies helped propel stocks higher last week.
The Dow Jones industrial average rose 1.12 percent last week, while the Standard & Poor’s 500 index advanced 1.22 percent and the Nasdaq composite index gained 0.81 percent.
Economic data
On Tuesday, the Commerce Department is expected to release data on housing starts and the Labor Department is set to release its producer price index, a measure of inflation at the wholesale level. The core PPI figure, which is also due, excludes food and energy costs, which can be volatile.
Also Tuesday, the International Council of Shopping Centers, a trade group, is expected to release a report on holiday shopping.
Wednesday brings a weekly report on crude inventories from the Energy Department.
On Thursday, the Commerce Department plans to issue its final report on the third-quarter’s gross domestic product. Final GDP is expected to have risen at an annual rate of 2.2 percent.
Richmond Fed President Jeffrey M. Lacker is expected to speak at the Charlotte Chamber of Commerce’s economic outlook conference.
The Conference Board’s index of leading economic indicators is also due Thursday. The reading attempts to predict the shape of the economy in six months. The Chicago Fed National Activity Index, which gauges overall economic activity and pressure from inflation, is expected Thursday as well.
The Philadelphia Fed also reports on regional manufacturing activity for December that day. And, lastly, weekly figures on initial unemployment claims are due Thursday.
Earnings
On Monday, investors will hear from Oracle Corp., which is expected to report a fiscal second-quarter profit of 22 cents per share. The stock, which has traded between $11.99 and $19.75, closed Friday at $17.68.
On Tuesday, Morgan Stanley is expected to turn in a fiscal fourth-quarter profit of $1.77 per share; other Wall Street banks have reported record profits for the fourth quarter. Morgan Stanley closed Friday at $79.26 and set a new 52-week high of $80.13, passing an earlier high of $80. The 52-week low is $54.52.
Also due Tuesday is a fiscal third-quarter report from Circuit City, which is seen earning 7 cents per share. The stock closed at $23.17 Friday and traded from $20.55 to $31.54 in the past 52 weeks.
On Wednesday, FedEx is expected to report a fiscal second-quarter profit of $1.75 per share. The shipping company has traded between $96.50 and $120.01 in the past 52 weeks and closed Friday at $115.06.
Thursday brings a handful of quarterly reports, including one from General Mills Inc. The cereal maker is expected to report a fiscal second-quarter profit of $1.03 per share. The stock closed Friday and has traded from $47.05 to $57.96 in the past 52 weeks. The stock closed Friday at $57.65.
To end the week, Walgreen Co. is slated to report fiscal first-quarter results on Friday. Wall Street expects the drugstore chain will earn 40 cents per share. The stock, which ended last week at $44.50, has traded between $39.55 and $51.60 in the past 52 weeks.