Four components of the Dow Jones Industrial Average and 135
other companies in the Standard & Poor's 500 Index are
scheduled to report quarterly results next week.
Economists expect a government report next week to show new-home
sales increased 13% in June. Meanwhile, the S&P/Cash-Shiller
Home Price Index will detail May home prices in major areas around
the U.S.
The U.S. House may vote as early as next week on legislation
that tightens regulations of offshore drilling.
Oil Giants Benefit From Refining Margins
Profits of major U.S. oil companies are expected to climb on
improved refining margins, which benefited from a stronger demand
for fuel in the second quarter. Exxon Mobil Corp. (XOM), the
world's largest publicly traded oil company, reports Thursday. Some
investors worry that its $25 billion purchase of U.S. natural gas
producer XTO Energy Inc. has diluted earnings per share and return
on capital employed. ConocoPhillips (COP) reports Wednesday and
Chevron Corp. (CVX) is due next Friday.
BP To Report Results, Won't Detail Probe
BP PLC (BP, BP.LN) will publish its second-quarter results
Tuesday, and analysts expect the oil giant to address many of their
concerns about how much the spill in the Gulf of Mexico will cost
BP and how it will pay for it. Press reports have suggested the
company would release preliminary results from its investigation
into the causes of the explosion aboard the Deepwater Horizon
drilling rig that triggered the three-month-long oil spill, but a
spokesman said BP will not do so. The company expects its
investigation to conclude in September or October.
Boeing Results Likely To Be Down From Year-Ago
Aerospace giant Boeing Co. (BA), which reports Tuesday, is
expected to post worse results than a year earlier as investors
look for an update on the 787 Dreamliner jet, which Boeing this
month said could see its first delivery delayed to next year on
continued testing supply-chain issues.
Also reporting are defense contractors Lockheed Martin Corp.
(LMT) on Tuesday, General Dynamics Corp. (GD) on Wednesday, and
Raytheon Co. (RTN) and Northrop Grumman Co. (NOC), both Thursday.
They all face challenges amid slowing U.S. defense spending.
Life Insurers Results Seen Improving
Life insurers Aflac Inc. (AFL) and MetLife Inc. (MET), which
report results Tuesday and Thursday, respectively, both are
expected to show improved earnings. Aflac is expected to discuss
its exposure to European sovereign debt while MetLife, the largest
U.S. life insurer, could detail its agreement to buy Alico, an
international insurance operation, from American International
Group Inc. (AIG) for $15.5 billion.
Also reporting are health insurers WellPoint Inc. (WLP) and
Aetna Inc. (AET), Wednesday morning and Tuesday night,
respectively. They may discuss effects of the health-care reform
legislation passed this spring.
Exchanges Nasdaq, CME See Rise In Trading
Stock exchange Nasdaq OMX Group Inc. (NDAQ), which reports
Tuesday, is seen reporting slightly better earnings on flat
revenue, while CME Group Inc. (CME), which reports Thursday, is
expected to show significantly better results. The world's biggest
futures exchange operator has already said the second quarter was
its second-busiest ever in terms of daily trading activity thanks
to an all-time record in May, likely helped by the historic May 6
crash and resulting market volatility.
Increase Expected In June New-Home Sales
The annual rate of new-home sales likely edged higher in June,
project analysts surveyed by Dow Jones, after a one-third plunge
from April to May following the expiration of a federal tax credit.
The figure, to be released Monday, is seen rising to 313,000 from
the initial report of 300,000 for May. On Thursday, the National
Association of Realtors said June sales of existing homes were
running at a seasonally adjusted annual pace of 5.4 million, down
5.1% from May but up 9.8% from a year earlier.
The S&P/Case-Shiller index, due Tuesday, will detail home
prices for May. The index showed prices rose in April from a month
earlier after falling for six straight months before that. A 3.8%
increase on-year is forecasted for May for the reading's 20-city
index.
Also, the U.S. government will issue its first look at
second-quarter gross domestic product next Friday--it could show
the economy grew 2.5%, down from the first quarter's 2.7% annual
rate.
Among other economic data, the final reading on the
Reuters/University of Michigan consumer sentiment index for July
will be out next Friday. The government will detail June sales of
durable goods Wednesday, and reports on manufacturing activities in
Texas, Chicago and Kansas City will be out Monday, Tuesday and
Thursday, respectively. The Federal Reserve will release its Beige
Book, with describes economic activity in 12 regions, on
Wednesday.
FDA Panel To Review Medtronic Spine Device
An advisory committee of the Food and Drug Administration on
Tuesday will review a Medtronic Inc. (MDT) spine device using a
protein designed to promote bone growth. On Friday, the agency said
it was concerned about a higher number of cancer cases seen among
patients treated with a spine device known as Amplify. Medtronic is
seeking FDA approval of the device, which is designed to stabilize
vertebrae in the lower back in patients with degenerative disc
disease.
House Could Vote On Drilling Limits Bill
The House is expected to vote as early as next week on
legislation that tightens regulations of offshore drilling,
formally restructures the agency that regulates such drilling, and
removes the cap on economic damages paid to residents and small
businesses by oil companies after oil spills. House Democratic
leaders plan to remove some controversial features from the
legislation to improve its chances of passage, a senior House
Democrat said Thursday. A day earlier, a top House Democrat
expressed confidence that a measure that would effectively ban BP
from winning new offshore oil exploration licenses would be
included in the bill.
Bill To Create Manufacturing Plan Before House
The House also is expected to vote by the end of next week on
legislation that would require the president to create a four-year
national manufacturing strategy to advance the country's interests
in the global economy. The act would require the president to
conduct a comprehensive analysis of the country's manufacturing
sector. The results would yield a four-year strategy that would
include long- and short-term goals for the country's manufacturing
businesses. The national strategy would be reported to Congress and
made available to the public.
House Ethics Panel To Try Rangel Next Week
U.S. House investigators have laid out a series of ethics
accusations against Democratic Rep. Charles Rangel, and he will
have the opportunity to defend himself at a public trial before the
House ethics committee beginning next week, according to a
statement Thursday from the panel, formally known as the House
Committee on Standards of Official Conduct. If found guilty,
Rangel, the once-powerful tax-writer who is one of the most senior
members of Congress, could be expelled from office or face a lesser
sanction such as admonishment.
Senate Panel Hearing On Lockerbie Release
Scotland's government has rebuffed a request by a U.S. Senate
committee to send two Scottish officials to testify at a hearing
Thursday that will explore the country's release last summer of the
convicted Lockerbie bomber amid allegations that BP may have
influenced the decision. The Senate has also invited BP Chief
Executive Tony Hayward, BP Special Adviser Mark Allen and former
U.K. Justice Secretary Jack Straw to testify. The Senate intends to
explore Scotland's decision last summer to release former Libyan
security agent Abdel Baset al-Megrahi. Scotland, the U.K. and BP
have all said the oil company played no part in the decision to
release Megrahi.
Arizona Immigration Law Effective Thursday
Arizona's contentious illegal-immigration law is scheduled to
take effect Thursday. Lawyers representing the Obama administration
argued in federal court this week that the law would violate the
U.S. Constitution by usurping federal authority over immigration,
an assertion denied by attorneys for Gov. Jan Brewer. In a separate
hearing, the American Civil Liberties Union and a coalition of
civil-rights groups argued against the law, which requires police
to question people they stop about their immigration status if
"reasonable suspicion" exists that they are in the country
illegally. It also makes it a state crime to be in the U.S.
illegally.
Blagojevich Trial Could Be Over Next Week
Closing arguments are expected to start Monday morning in the
federal corruption trial of former Illinois Gov. Rod Blagojevich
after his attorneys rested their case Wednesday without putting
their client on the stand. That cut short what had been expected to
be weeks of testimony by a parade of potential star witnesses.
Since federal agents arrested Blagojevich in December 2008, he had
promised repeatedly and publicly that he would testify in his
defense and clear his name. The former governor faces 24 counts,
including attempting to sell the U.S. Senate seat vacated by
President Barack Obama. His brother, Robert Blagojevich, faces five
counts, including attempted extortion and wire fraud. Both
brothers, who were tried in tandem, have pleaded not guilty.
Conferences
Among the significant conferences next week are the Keefe,
Bruyette & Woods Inc. Community Bank Investor Conference from
Monday through Wednesday in New York and Financial Services
Exchange Conference from Wednesday through Saturday in Fort
Lauderdale, Fla.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
kathy.shwiff@dowjones.com
(Dow Jones Newswires staff contributed to this article.)
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