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Preview | SEPT. 8-14

September 08, 2003

Consumer Confidence, Retail Data Expected

After racking up heady gains in a near six-month-long rally, stocks are poised for even more upside this week as investors look ahead to a strong quarterly earnings season, which kicks off next month.

A string of positive economic data in recent weeks, combined with a bullish revenue forecast from technology bellwether Intel Corp. last week, will underpin market sentiment in the coming week, analysts told Reuters.

Though the market has determinedly brushed off bad news in recent months, it will be vulnerable to signs that a fledgling economic recovery may be weaker than expected.

Last Friday, stocks ended lower, weighed by a government report showing that U.S. employers cut jobs in August at the fastest pace since March, marking the seventh straight month of declines. The report showed that Americans are still having a hard time finding work, even as other areas of the economy are improving.

Despite the gloomy jobs report, investors said they were still optimistic that an economic rebound later this year would translate to robust corporate earnings.

But analysts remain wary of this week's jobs report, due out on Thursday from the Labor Department.

"The news from Intel is probably going to set the tone as much as the jobs report," said Hugh Johnson, chief investment officer at First Albany Corp.

On Thursday, Intel, the world's largest maker of semiconductors, forecast that its quarterly sales would hit the high end of its target range, and potentially above analysts' estimates.

"People are hoping that all this stimulus from the government and productivity gains will translate into earnings," said Peter Dunay, chief market and options strategist at brokerage Wall Street Access.

This week, companies in the earnings spotlight include Web publishing software maker Adobe Systems Inc., which reports results on Wednesday, and Oracle Corp., the world's second-biggest software company, due to report on Friday.

Most of the week's economic readings will land on Friday, with the release of two key government reports. The Commerce Department will issue August retail sales data, and the Labor Department will issue its August producer price index, a measure of U.S. wholesale prices.

Purchases at the nation's retailers may have increased 1.5% in August as Americans snapped up cars, computers and back-to-school items, based on the median forecast in a Bloomberg News survey. Sales, which rose 1.4% in July, haven't jumped by more than 1% in consecutive months in 3 1/2 years.

"Things are strengthening," Terry Lundgren, chief executive of Federated Department Stores Inc., said in a televised interview with Bloomberg. Spending will accelerate "hopefully in the fourth quarter but certainly in 2004," he said.

The University of Michigan also will release its monthly gauge of consumer sentiment for September. Forecasters told Reuters they expected a preliminary reading of 90, up slightly from an earlier reading of 89.3. Analysts look to consumer sentiment as an indicator of consumer spending, which accounts for two-thirds of the U.S. economy.

Here is a roundup of this week's key events.

Today:

Federal Reserve reports on consumer credit for July.

Bankruptcy Court begins final hearings on WorldCom.

Tuesday:

Diplomats from 146 nations gather for five-day meeting of the World Trade Organization, and heated negotiations are expected in effort to further lower global trade barriers by the end of 2004. Anti-globalization protesters are threatening to disrupt meetings.

Securities and Exchange Commission Chairman William H. Donaldson testifies to the Senate Banking Committee on implementation of corporate reform legislation.

Wednesday:

World Trade Organization opens ministerial conference on new global trade rules in Cancun, Mexico.

Treasury Secretary John W. Snow testifies before House Financial Services Committee on oversight of Fannie Mae and Freddie Mac.

Thursday:

Commerce Department reports on international trade for July.

Labor Department reports on weekly jobless claims.

Freddie Mac reports on mortgage rates.

Friday:

Federal court in Denver holds hearing on telemarketers' challenge to national do-not-call list.

Commerce Department reports on retail sales for August.

Labor Department reports on August producer price index.

University of Michigan releases its monthly gauge of consumer sentiment for September.

From Times Wire Services

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Wireless Firms to Unveil User Rights Guidelines

U.S. wireless telephone companies, including Verizon Wireless Services Inc. and Cingular Wireless, on Tuesday will unveil voluntary guidelines that are designed to bolster customer rights.

The Cellular Telecommunications & Internet Assn., an industry trade group, said carriers that adopt the 10 rules would have to include more disclosure in advertising and allow customers a 14-day trial period to cancel new service.

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