Dados para esta semana EUA: After the fireworks?

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After the fireworks?

After seeing the best week of gains in 2005 last week, bulls could face some resistance this week.
May 21, 2005: 10:16 AM EDT
By Alexandra Twin, CNN/Money Staff Writer


NEW YORK (CNN/Money) - After driving 2005's biggest week of stock gains, investors return to work next Monday facing a key question -- now what?

Falling oil prices, upbeat corporate news, and most importantly -- the belief that the Fed can keep raising rates at a "measured" pace -- propelled stocks last week, with the three major stock indexes each gaining more than three percent.

Next week brings a few economic reports that, if forecasts are reasonably on target, should further make the case that the economic growth is on track, and that the March soft patch was just that and not something more substantial.

But other than those reports, the week is fairly light on news and likely to be light on trading activity, as investors bail out early ahead of the following week's Memorial Day holiday.

In addition, even with the past week's gains, the stock market remains lower for the year, and looks to remain rangebound for some time.

"I think we are likely to remain in a trading range for some time," said Ben Halliburton, chief investment officer at Tradition Capital Management.

"Recent reports have made it clear that the economy is not going to slide into recession," he added, "however we are still looking at a slower rate of growth this year, there have been some signs of inflation, and we think it is too soon for the Fed to halt its rate-hiking campaign."

All of these factors could make sustained gains challenging over the next few weeks.

The week ahead

Investors returning from a weekend likely focusing on Siths, storm troopers and Skywalkers will be greeted with reads on gross domestic product growth and hints about the thought processes of the Fed-policy makers.

Gross domestic product growth is expected to be revised up and personal income and spending is expected to continue to show solid gains.

Additionally, the key inflation read next week -- the personal spending report's PCE index -- is expected to stick to unchanged, further helping to reassure investors that inflation is contained.

The week's biggest potential market mover is likely the release Tuesday of the minutes from the last Federal Reserve policy-setting meeting.

While the central bank's minutes are unlikely to offer any large surprises, investors will be looking for the Fed to indicate that the soft patch has passed and that the economy is strong, but that inflation is not a big threat. Something that deviates from that could spark a little selling, analysts say.

"GDP should be revised up next week, but there's nothing really earth-shattering on tap for stocks," said Jack Ablin, chief investment officer at Harris Trust.

"What I think would be good for the market next week is if we can see it calm down a little bit," he added. "While I am encouraged by the move (last week), when you see this kind of action, that to me shows the investor confusion that is still present."

Key events in the week ahead

Campbell Soup (down $0.04 to $30.34, Research) is due to report results Monday and is expected to have earned 33 cents per share, a penny more than expected, according to a consensus of analysts surveyed by First Call.


On Tuesday, the April existing home sales report is expected to have shown a rise to a 6.90 million unit annual rate from a 6.89 million unit annual rate in March, according to a consensus of economists surveyed by Briefing.com.


New home sales, due Wednesday, are expected to have fallen to a 1.345 million unit annual rate, down from a 1.431 million unit rate in March.


April durable goods orders, due Wednesday, likely rose 1.1 percent, according to forecasts, after falling 2.3 percent in March.


The revised read on first-quarter gross domestic product growth is expected to show an upward revision to a 3.7 percent annual rate, when it's reported Thursday, up from the early read of 3.1 percent.


Toll Brothers (down $0.21 to $84.48, Research) is due to report results Thursday. The homebuilder is expected to have earned $1.79 per share, up from 95 cents a year ago.


Computer Associates (down $0.02 to $28.98, Research), also due Thursday, is expected to have earned 20 cents, up from 18 cents a year ago.


April personal income and spending figures are due Friday. Income likely rose 0.6 percent in the month, after rising 0.5 percent in March. Spending likely rose 0.8 percent after rising 0.6 percent in March. The core PCE index, the spending report's main inflation gauge, is expected to hold steady after rising 0.3 percent in March.


Also due Friday: the revised may read on consumer sentiment from the University of Michigan. The index is expected to be revised up to 86.0 from 85.3 in April.