Investors will be watching this week to see whether the price of crude oil continues to fall or bounces back up again after a seesaw last week -- up more than $5 on Thursday, followed by a $6 drop Friday.
Stocks have been moving largely in an opposite lock step with oil for the last few months. Financial sector developments, of course, can thwart the pattern -- investors react to practically any report involving such names as Fannie Mae, Freddie Mac or Lehman Bros. Holdings Inc. -- but Wall Street has made it clear: It likes oil price declines.
Wall Street has been upbeat about the pullback in energy prices because it hopes lower fuel costs will help take some pressure off consumers.
This week, economists surveyed by Thomson Financial/IFR expect the Commerce Department to report that personal spending rose 0.2% but that personal income slipped 0.1%. They also predict that month-over-month inflation at the personal spending level will edge up to 0.3%.
Analysts are split, though, over oil's next move. Crude ended the week at $114.59 a barrel on the New York Mercantile Exchange, a few dollars above its recent lows. Meanwhile, the financial sector has been on quite the turbulent ride. Given the mixed bag of economic readings that Wall Street is anticipating, the market's volatility is not likely to go away this week.
Last week, the Dow Jones industrial average finished down 0.3%, the Standard & Poor's 500 index ended 0.5% lower and the Nasdaq composite index fell 1.5%. The Dow again had several triple-digit point moves.
Today, the National Assn. of Realtors reports on existing-home sales for July, and then Tuesday, Standard & Poor's/Case-Shiller release their June home price index and the Commerce Department posts its new-home sales data for July.
Economists expect existing-home sales to have risen last month but new-home sales to have slipped.
On Tuesday, the Federal Reserve releases minutes from its last meeting, during which it kept the key interest rate steady at 2%.
On Wednesday, the Commerce Department reports on durable goods orders, which are expected to have risen 0.1% in July.
On Thursday, the department releases its preliminary reading on second-quarter gross domestic product. After the disappointing growth estimate of 1.9% last month, the market is anticipating the figure to be revised up to 2.7%.
Also Thursday, the Labor Department releases its weekly data on unemployment benefit claims -- a reading that is being increasingly scrutinized as Wall Street tries to gauge how sharply the job market is deteriorating.
At a glance
Results of weekly Treasury auction.
National Assn. of Realtors reports on existing-home sales for July.
Conference Board releases its consumer confidence index.
reports July new-home sales.
Case-Shiller home price
indexes for June and second quarter are released.
Office of Federal Housing Enterprise Oversight reports on second-quarter home price index.
Federal Reserve releases
minutes of its last committee meeting.
Quarterly earnings results expected from Borders Group and Smithfield Foods.
reports on durable goods orders for July.
Labor Department reports on weekly jobless benefit claims.
Freddie Mac reports weekly mortgage rates.
reports preliminary second-quarter gross domestic
Quarterly earnings results due from Dell, Sears and Tiffany.
reports personal income for July.
Source: The Associated Press