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Preview/ WEEK OF FEB. 3 - 9

Wall Street to Watch Flood of Economic Data

February 03, 2003|From Bloomberg News, Reuters

The investigation of the space shuttle Columbia disaster and brewing geopolitical events probably will push nearly all other events to the back burner this week. Yet a flood of economic reports -- particularly data on the manufacturing sector and the labor market -- could help determine Wall Street's mood.

The Institute for Supply Management's closely watched gauge of the factory sector, set for release today, and the U.S. payrolls report on Friday will give investors some early glimpses of the state of the economy in January.

The ISM index for January is expected to slip to 53.7 from 55.2 in December, according to economists in a Reuters survey. It would be the third month in a row above the 50 level that separates expansion from contraction, potentially cementing hopes the manufacturing sector is recovering from its slump.

The report on nonfarm payrolls will be the economic highlight of the week. Payrolls are expected to rise by 70,000 in January after a 101,000 drop in December, though the jobless rate is expected to remain steady at 6%.

Evidence that the U.S. economy is pulling out of its soggy patch has been spotty, at best, and the increasing possibility of war has whipped up fears that growth could stumble as corporate America puts off investment decisions and stubbornly high oil prices bite into corporate profits.

The steady parade of corporate earnings probably also will fade into the background somewhat, but Wall Street will be tuned in for results and forecasts from technology bellwether Cisco Systems Inc. and No. 4 U.S. long-distance telephone company Sprint Corp.

Wall Street will be watching on Wednesday when Secretary of State Colin L. Powell goes before the U.N. Security Council to try to persuade doubters that Iraq has weapons of mass destruction. Iraq denies it possesses banned arms.

Worries that a war could disrupt oil supplies, coupled with a 2-month-old strike that has crippled oil production in Venezuela, a major U.S. supplier, have helped push the price of crude oil above $33 a barrel.

Those high prices have sparked fears that corporate profits, already weak, could take another blow as companies and consumers are forced to shell out more for energy costs.

Other economic reports this week:

* Wednesday, the Institute for Supply Management will release its service sector index for January.

* Today, Commerce Department will report on factory orders placed in December.

Commerce Department will report on December construction spending.

* Thursday, Labor Department will report on fourth-quarter productivity.

* Friday, Commerce Department will issue its December report on consumer borrowing.

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