NEW YORK - Wall Street's fixation on economic data turns into a craving for profit news and forecasts this week as a slew of corporate earnings reports arrive.
Investors will receive their first big batch of reports from the final quarter of 2006 and try to determine whether the robust profits that have propelled stocks to new heights will continue.
While market forecasters expect profit growth to slow in 2007 amid what is seen as a decelerating economy, investors are nonetheless eager to gain a better sense of how companies fared in the fourth quarter. The quarter and overall year saw enormous gains in stock prices, justified in part by double-digit earnings growth.
Gains continued last week, with the Dow Jones industrial average rising 1.27 percent to a record close Friday. The Standard & Poor's 500 index advanced 1.49 percent, and the technology-laden Nasdaq composite rose 2.82 percent.
Though earnings season had its unofficial start last week with Alcoa Inc.'s better-than-expected results, the real action begins today, when the week shortened by Martin Luther King's Birthday starts, and investors hear from Intel Corp.
While investors will keep tabs on earnings, economic readings will still hold great sway over the mood on Wall Street. The week brings a slew of data, including figures on inflation and regional manufacturing.
Wall Street has reacted to recent economic reports with a mix of concern, enthusiasm or indifference as it struggled to determine whether the economy was slowing adequately or headed toward recession. It is hoped a gradual slowdown would protect corporate profits and allow the inflation-wary Federal Reserve to lower short-term interest rates.
Investors returning to work today will be greeted with a snapshot of regional activity from the New York Fed, which is expected to release its Empire State manufacturing survey for January.
Tomorrow brings a flurry of data, including the U.S. Fed's beige book, which summarizes regional economic activity across the country. Release of the report precedes the central bank's first meeting of the year at the end of the month.
Also due is the Labor Department's December Producer Price Index, a measure of inflation at the wholesale level. The Fed is also expected to release its report on industrial production and capacity utilization for December.
On Thursday, Fed Chairman Ben S. Bernanke testifies before the Senate Budget Committee on the long-term fiscal challenges facing the United States.
Thursday is also a big day for economic data, with readings on inflation at the consumer level. The Labor Department's Consumer Price Index as well as the core CPI are due that day. The core figure excludes food and energy costs, whose volatility can distort readings.
The Commerce Department is expected to weigh in with figures on December housing starts and permits. And a report from the Federal Reserve Bank of Philadelphia on regional manufacturing is also expected Thursday.
Rounding out the week Friday is the University of Michigan's preliminary consumer-sentiment reading for January.
Intel is expected to earn 25 cents a share when it reports fourth-quarter results today. The chip-maker, which has traded between $16.86 and $25.52 in the last 52 weeks, closed at $22.13 Friday.
On Wednesday, Wall Street expects to hear from American Airlines parent AMR Corp., which is seen as reporting a fourth-quarter loss of 7 cents a share. The stock reached a new 52-week high of $37.94 Thursday. The stock, which closed Friday at $37.56, traded as low as $18.76 in the last 52 weeks.
Also that day, Apple Inc. is expected to report fiscal first-quarter results. The computer-maker last week reached an all-time high after it unveiled plans for a mobile phone. Apple is forecast to earn 78 cents a share. The stock, which closed Friday at $94.62, traded between $50.67 and $97.00 in the last 52 weeks.