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PREVIEW / AUG. 4 - 10

Earnings Report Flood Will Slow to a Trickle

August 04, 2003|From Reuters and Bloomberg News

Corporate earnings reports will continue to make headlines this week, but the flow will be cut from a flood to a trickle.

A few big names -- tech bellwether Cisco Systems Inc.; MetLife Inc., one of the largest U.S. life insurers; and U.S. Steel Corp., the nation's biggest integrated steelmaker -- will report results.

Cisco, the world's largest maker of equipment that directs Internet traffic, will report earnings after the regular trading session ends Tuesday. Analysts will scrutinize any outlook from Cisco, which is seen as a key barometer of corporate America's capital spending plans because of its broad customer base.

On the economic data front, factory orders and the Institute for Supply Management's closely watched services-sector index will catch the stock market's interest.

But after last week's earnings and data blitz, the first week of August will be almost as plain as a vanilla ice cream cone. More than 400 companies in the Standard & Poor's 500 index already have reported second-quarter earnings.

"There's not a lot going on ... we're going to see what the words 'summer doldrums' are all about," said Hugh Johnson, chief investment officer at First Albany Corp. On Wall Street, "trading will be very subdued," he predicted.

Stocks weakened Friday on disappointment over the July employment report, which showed the economy lost jobs for a sixth straight month.

The Dow Jones industrial average slid 79.33 points, or 0.9%, to 9,153.97. The Nasdaq composite lost 19.40 points, or 1.1%, to 1,715.62.

Other recent economic data have been upbeat, however, and that has supported stock prices despite a jump in Treasury bond yields, analysts said. The Dow's 1.4% loss last week was its first decline in five weeks.

Year-to-date the Dow is up 9.7%, while Nasdaq is up 28.5%.

Today, a report on June factory orders will give economists an idea about the state of the nation's struggling industrial sector. Orders are forecast to rise 1.3%, compared with May's 0.4% gain, according to economists polled by Reuters.

On Tuesday, the Institute for Supply Management will release its index of non-manufacturing activity, a key gauge of the services sector, which accounts for more than two-thirds of the economy. The ISM non-manufacturing index is expected to slip to 58.0 in July from 60.6 in June.

Stock investors also will scrutinize Thursday's government release of weekly first-time claims for unemployment benefits to get more clues about the struggling labor market.

Here is a brief roundup of the key business and economic events scheduled for this week:

Today:

* Commerce Department reports on factory orders for June.

* U.S. Steel and Metropolitan Life issue quarterly reports.

Tuesday:

* Institute for Supply Management releases index of July non-manufacturing activity.

* Cisco Systems issues quarterly report.

* Treasury sells $24 billion of three-year notes, the first phase of a $60-billion bond auction to finance the budget deficit.

Wednesday:

* The Securities and Exchange Commission considers possible changes in rules governing nomination of corporate directors and communications between corporate directors and major shareholders.

* Treasury sells $18 billion in five-year notes.

* Jack in the Box reports quarterly earnings.

Thursday:

* Labor Department reports on second-quarter productivity. It also reports on weekly jobless claims.

* Treasury sells $18 billion of 10-year notes.

* Federal Reserve reports on consumer credit for June.

* Univision issues quarterly report.

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