Summertime, and stocks are queasy

Eric Wahlgren

NEW YORK: As far as the stock market is concerned this coming week, there

ain't no cure for the late summertime blues, amid Wall Street's ongoing concern

over how much future corporate profits will suffer if the US economy is truly

slowing.

Things are not expected to get better until Aug. 22, when the Federal Reserve

will tell the world whether it plans to raise interest rates again.

"I think the market is going to do more of the same," said

Westfalia Investments director of research Peter Cardillo. "It will make

attempts to go higher and go back down again. I suspect we aren't going to do

much until we get the (Fed meeting) out of the way."

Investors to rifle through data for rate clues



With the central bank's powwow on interest rates less than two weeks away,
investors will rifle through upcoming economic reports for clues on the Fed's

next move.

The inflation-fighting central bank has raised rates six times since June

1999 to keep the US economy from revving too high.

The main attraction this week will be Wednesday's release of July's Consumer

Price Index, a gauge of inflation at the consumer level.

The CPI is seen as having bumped up 0.2 per cent in July, even when volatile

food and energy prices are excluded.

Analysts said they were not expecting any big surprises on the inflation

front after July's Producer Price Index, a gauge of price pressures at the

wholesale level, showed no signs of inflation.

Last Friday, the PPI came in unchanged, while analysts had forecast an uptick

of 0.1 per cent.

"The PPI is the start of the food chain on inflation," said

Michelle Clayman of New Amsterdam Partners, an asset management firm. "I

really think it was a remarkable number. It says to me that inflation is under

wraps."

Clayman said she would pay particular attention to June figures on business

inventories due out on Monday, for any signs that the economy is easing up.

Inventories are expected to show a June rise of 0.5 per cent compared with a

0.8 per cent boost in May, according to analysts polled by Reuters.

"There have been some signs of a light buildup in inventories,"

Clayman said. "That could mean a slowdown down the road."

New home construction figures for July, set for Wednesday, are generally seen

as conforming to a slowing trend as higher interest rates tend to crimp the

credit-sensitive housing industry.

Economists forecast that housing starts last month rose to an annualized rate

of 1.555 million from 1.554 million in June.

Retailers under the microscope this week



A slew of retailers are expected to report earnings this week, but a let up in
consumer spending and a series of profit warnings have Wall Streeters looking

for only ho-hum results.

Earnings, typically a tonic for the stock market when they are strong, have

largely failed to wow Wall Street during this earnings reporting season, which

is winding down.

Among some of the brand name retailers to release their scorecards this week

are Home Depot Inc., JC Penney Co. Inc., Toys R Us Inc., Nordstrom Inc. and

Target Corp.

Computer maker Hewlett-Packard Co., a Dow component, is also expected to post

its results this week.

Last week, investors responded to expectation-topping profits from Dell

Computer Corp., the word's No. 2 maker of personal computers, by selling the

stock.

Dell's revenues fell slightly short of what analysts had projected, although

chief executive Michael Dell said the company still expected to reach its

revenue growth targets for the year.

"I think we can expect more of the same for the market this week,"

said Edward Jones chief market strategist Alan Skrainka. "There is a

recognition that the bar has been set too high for technology companies. I think

investors are going to seek companies that offer dependable results in a slowing

economy."

Last week, the tech-stacked Nasdaq composite index gained only about 2 points

for the week, while the blue chip Dow Jones industrial average advanced 260

points, or 2.4 per cent.

(C) Reuters Limited 2000.