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Investors Hope for Strong Retail Reports
Publish Date : 11/30/2004 6:11:00 PM   Source : Business News Onlypunjab.com

Will Wall Street wrap up another year-end rally in time for the holidays? A key job creation report and the strength of the weekend's shopping kickoff will determine the rally's fate in the week ahead.

Retail stocks will certainly move on Monday as reports from the weekend's sales come in, but investors also will look closely to see if consumers are spending enough to revive the sluggish economic growth seen in the second half of the year.


Friday's job creation report from the Labor Department is also considered a measure of consumer spending, since more people working means more people with spending money and more economic activity. October's report showed a substantially higher than expected 337,000 jobs created. For November, Wall Street is expecting at least 200,000 new jobs. Another positive surprise, combined with a good showing from retailers, could bolster stocks through year's end.

Last week, holiday-shortened trading and little news left only investors' bullishness to push stocks modestly higher. For the week, the Dow Jones Industrial average rose 0.62 percent, the Standard & Poor's 500 index gained 1.05 percent, and the Nasdaq composite index was up 1.51 percent.

ECONOMIC NEWS:

While the jobs report on Friday will dominate economic discussion in the week ahead, a number of other important reports have the potential to move the market.

On Monday before the trading session begins, the Commerce Department was expected to release its preliminary gross domestic product figures for the third quarter. Wall Street is expected GDP to rise 3.7 percent, the same increase posted for the second quarter of the year.

The Conference Board will issue its consumer confidence index reading for November at 10 a.m. Monday. This key measure of consumers' feelings toward the economy is expected to come in at 96.8, up from the 92.8 reading in October.

Finally, on Wednesday, the Institute for Supply Management will release its manufacturing index, which measures the nation's overall industrial activity. Analysts expect a reading of 57 for November, up slightly from October's reading of 56.8.

EARNINGS:

Only a handful of companies are posting earnings this week, with the bulk of third quarter earnings already issued and most companies focusing now on the fourth quarter. Unexpected updates and outlooks will be common through December, and investors will be keeping an eye out for them.

A pair of large grocery store chains are due out with earnings this week. Pathmark Stores Inc. is busy fending off continued financial difficulties, and warned in October that its earnings, due Thursday morning, would miss previously stated profit forecasts. The struggling grocery chain is expected to lose 22 cents per share for the quarter, compared to a profit of 7 cents per share a year ago.

Pathmark shares have been hit hard as the company went through debt refinancing and slashed its profit outlook, falling 41.4 percent from its 2004 high of $9.19 on April 23 to close Friday at $5.39.

Albertson's Inc. has fared better, off just 4.5 percent from its 2004 high of $26.88 on June 24, closing Friday at $25.66. The company, which was scheduled to report earnings before Thursday's session, was expected to post profits of 33 cents per share, compared with 25 cents per share a year ago.

Among the few notable companies also reporting this week, high-end retailer Neiman-Marcus Group Inc., reporting after Wednesday's session, was expected to earn $1.42 per share, up from $1.16 per share a year ago. And hotel and casino operator Mandalay Resort Group Inc., slated to merge with MGM Mirage Inc. early next year, was expected to make 88 cents per share when it reports after Thursday's session, up from 67 cents per share in last year's quarter.



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