A quarter of the companies in the Dow Jones Industrial Average
and 10% of the Standard & Poor's 500 Index report quarterly
results next week as earnings season kicks into a higher gear.
Meanwhile, people worldwide will be focused Tuesday on
Washington, when former Sen. Barack Obama becomes the first black
president of the U.S.
The main economic reports next week are expected to show a
continuing decline in home construction as the market remains
saturated with unsold new homes and those for sale after
foreclosures.
GE Reports As Investors Worry<
General Electric Co. (GE) is set to report fourth-quarter
results Friday amid widespread investor jitters regarding the
company's performance. Barclays analyst Robert T. Cornell
speculated GE may unveil an unpleasant surprise, posting earnings
at the low end of last month's downbeat view, with more than half
of profit coming from a tax benefit.
The conglomerate is generally considered something of a
barometer for the industrial economy, but concerns regarding its
big finance unit have been at the heart of its precipitous stock
decline amid the ongoing credit crisis. GE-owned CNBC reported
Friday that GE Capital will eliminate about 7,000 jobs, almost 40%
of its work force.
Major Tech Companies Issue Reports<
Some of the nation's biggest technology companies issue results
next week, including International Business Machines Corp. (IBM),
Microsoft Corp. (MSFT), Apple Inc. (AAPL) and Google Inc. (GOOG).
Analysts are largely expecting IBM, which reports Tuesday, to
provide some welcome - if only temporary - steadiness to a tech
sector that has become rife with disappointing quarterly results
and weak outlooks. Microsoft, which reports Thursday, several
months ago cut its revenue-growth target at its client division,
which is responsible for the company's most important product: the
Windows operating system.
When Apple unveils on Wednesday, concerns about the health of
Chief Executive Steve Jobs and the company's outlook are likely to
be the focus of attention. A slight revenue gain is expected for
the quarter, but earnings are seen falling. By contrast, online-ad
and Internet-search giant Google's per-share earnings are expected
to rise to $4.97 on revenue of $4.14 billion, from $4.43 and $3.39
billion, respectively, a year earlier.
J&J, Abbott Labs To Post Results<
Johnson & Johnson (JNJ), which reports Tuesday, is expected
to post higher earnings, though delays on drug approvals and
growing generic competition to the oral form of blockbuster
antipsychotic Risperdal made for a tough quarter at J&J's
pharmaceutical division, its largest by sales.
Abbott Laboratories (ABT), which this week agreed to acquire
Advanced Medical Optics Inc. (EYE) for $1.36 billion, reports
Wednesday. It too is expected to report increased profit.
Railroad Results May Show Pricing Power<
Several major railroads will report quarterly results next week,
with interest keen about whether they've been able to retain
pricing power amid slumping shipping volumes and fuel costs. CSX
Corp. (CSX) reports Tuesday, while Burlington Northern Santa Fe
Corp. (BNI) comes a day later and Union Pacific Corp. (UNP) on
Thursday.
CSX warned recently that it will take a fourth-quarter charge
related to economic baggage from the lavish Greenbrier resort it
owns in West Virginia. Still, the railroad said higher overall
freight charges led to a 4% increase in revenue.
Also reporting next week are several major airlines, including
AMR Corp. (AMR), parent of American Airlines, and UAL Corp. (UAUA),
parent of United, both Wednesday, and Southwest Airlines Co. (LUV)
on Thursday. Most U.S. carriers face another quarter of red ink
amid lower demand, despite a break in fuel prices, though Southwest
is expected to return to a profit after a rare loss in the third
quarter.
Reports Detail Builder Sentiment, Housing Starts<
In a light week for economic reports, the National Association
of Home Builders releases its January builder sentiment index
Wednesday, and the government reports on December housing starts on
Thursday. Last month, the builder index remained at a record-low
level, signaling continued weakness in construction. A month
earlier, construction of new dwellings dropped 19% to a seasonally
adjusted annual rate of 625,000, the lowest since the Commerce
Department began keeping records 50 years ago. Housing starts are
expected to fall to 610,000 for December.
Markets Closed Mon, Open Tue<
Stocks and other U.S. financial markets will be closed Monday,
for Martin Luther King Jr. Day, but will be open as usual Tuesday,
Inauguration Day. In staying open with normal hours as Barack Obama
is sworn in as the 44th U.S. president, the markets are following
precedent. The closest the New York Stock Exchange came to an
inauguration-related closing was when it was closed for three
business days in 1889 for the 100th anniversary of President
Washington's inaugural.
President-elect To Ride Rail To DC<
President-elect Barack Obama kicks off his inauguration
festivities Saturday with a train trip from Philadelphia to the
nation's capital. The trip renews a tradition that has lain dormant
for more than 50 years and is one of several tributes Obama will
pay during the next few days to Abraham Lincoln, who traveled a
similar route before his inauguration in 1861.
Record crowds, including an estimated 2 million visitors, are
expected in Washington for Obama's swearing-in ceremony. On Sunday
evening, a free concert at the Lincoln Memorial features singers
Beyonce, Mary J. Blige, Bono, Garth Brooks, Sheryl Crow, Renee
Fleming, Bruce Springsteen, James Taylor, will.i.am and Stevie
Wonder. There will also be historical readings by Jamie Foxx,
Martin Luther King III, Queen Latifah and Denzel Washington.
Senate Panel Hearing On Geithner Wed<
The Senate Finance Committee will hold a confirmation hearing on
the nomination of Timothy Geithner to be Treasury secretary
Wednesday. The hearing was delayed from Friday after reports that
the current head of the New York Federal Reserve Bank failed to pay
more than $34,000 in Social Security and Medicare taxes on money he
earned at the International Monetary Fund between 2001 and
2004.
Stuart Levey, currently a Treasury undersecretary for terrorism
and financial intelligence, will effectively run the department
until a successor for current Secretary Henry Paulson is
confirmed.
Men's Fashion On Stage In Milan, Paris<
New designs for men's fall fashion will be shown next week in
Milan and Paris. Shows start Saturday and continue through
Wednesday in Milan before attention shifts to Paris, where men's
ready-to-wear clothing for next fall and winter goes on display
beginning Thursday.
Conferences
Among the significant conferences next week are the Institute
for International Research's 13th Annual Drug Delivery Partnerships
Conference from Wednesday through Friday in Las Vegas, Information
Management Network Winter Forum On Real Estate Opportunity &
Private Fund Investing Conference from Wednesday through Friday in
Laguna Beach, Calif., and Green Power Conferences Voluntary Carbon
Markets USA Conference on Thursday and Friday in New York.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
kathy.shwiff@dowjones.com
(Bob Sechler and other Dow Jones Newswires staff contributed to
this report.)
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