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Week Of June 23 - 29

June 23, 2003

Wall Street Looking

for Interest Rate Cut

After a blazing three-month stock market rally, investors are waiting to see if the Federal Reserve this week dishes up a single or double dose of interest rate cuts in a bid to shore up sagging U.S. growth.

Wall Street is expecting the Fed to cut interest rates by a quarter of a percentage point at its two-day monetary policy meeting Tuesday and Wednesday, but whether it will opt for a more aggressive half-point cut is up in the air.

Uncertainty about the Fed's intentions, along with possible corporate profit warnings as the quarterly "confession" season heats up, may keep investors walking on eggshells.

"Until we get into the earnings season, there may not be a lot of positive catalysts for the market, and, absent that, some folks may decide to go ahead and take some money off the table," said Rich Nash, chief market strategist at Victory Capital Management.

Earnings reports from a handful of companies will garner attention, including results from Walgreen Co., FedEx Corp., Kroger Inc., Goldman Sachs Group Inc., General Mills Inc. and ConAgra Foods Inc.

A number of economic reports due out this week also are likely to catch investors' attention as Wall Street searches for signs that consumer spending -- the linchpin of U.S. growth -- will hold strong.

Among those reports is the Conference Board's consumer confidence index, due Tuesday. It is expected to show a slight decline in June from May. The University of Michigan's final consumer sentiment report for June will be the focus Friday. The government's report on personal income and spending, also due Friday, is expected to show both rose slightly in May.

Here is a quick look at some of the key business events and economic events set for this week.

Monday:

* Biotech Industry Organization opens three-day annual meeting in both Washington and San Francisco.

* Todd Geiger, a former vice president of El Paso Corp. charged with reporting fake trades to influence energy prices, goes on trial.

* The Supreme Court is expected to issue a decision this week on a challenge to minority preferences at the University of Michigan.

Tuesday:

* Federal Reserve's Open Market Committee meets for the first day of a two-day session to discuss interest rates.

* The Conference Board releases the results of its monthly survey on consumer confidence.

* Senate Judiciary Committee takes up asbestos litigation bill.

* Senate Judiciary panel holds hearing on media concentration.

Wednesday:

* Commerce Department reports on durable goods orders and new home sales for May.

* National Assn. of Realtors reports on existing-home sales for May.

* Federal Reserve's Open Market Committee announces its decision on interest rates.

* House Financial Services Committee holds hearings on Fannie Mae and Freddie Mac.

Thursday:

* Commerce Department reports on gross domestic product, first quarter, final.

* Labor Department reports on weekly jobless claims.

* Freddie Mac reports on mortgage rates.

Friday:

* Commerce Department reports on personal income and spending for May.

* University of Michigan's consumer sentiment index for June.

From Times Wire Services

Bids Due for Freedom Communications

Shareholders of Irvine-based Freedom Communications Inc. will soon learn what potential buyers are willing to pay for all or part of one of the nation's last family-owned media companies.

Preliminary bids are due Thursday, after which they will be evaluated by investment bank Morgan Stanley on behalf of a committee of independent Freedom board members.

Freedom will not say how many bids are expected or how many potential bidders requested confidential information about the company, whose shares are not publicly traded.

But analysts expect major media companies, including Gannett Co., to be interested in Freedom's 28 daily newspapers, including its flagship, the Orange County Register; 37 weeklies and eight TV stations

"The assets have attracted an enormous amount of attention because they have not been on the market ever," Freedom Chief Executive Alan Bell said.

The Federal Communications Commission recently made it easier for large media companies to buy more TV stations and for newspaper publishers to own broadcast outlets in the same market. Those relaxed rules make Freedom's properties even more attractive, analysts say.

Independent analysts have pegged the company's value at $1.5 billion to $2 billion.

This week's bids are the first round in a process that will result in a recommendation from the board to shareholders sometime this fall.

From Associated Press

*

Former Enron Energy Trader to Be Arraigned

A former top Enron Corp. energy trader will be arraigned in federal court in San Francisco on charges stemming from Enron's manipulation of power markets during California's energy crisis.

John Forney, 41, was arrested in Ohio on June 3 on charges alleging he was an architect of several illegal trading schemes used to inflate power prices.

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