Week Ahead: Stimulus, Car Sales and Retail Sales
Wall Street will be focused on the Senate next week as that body debates its version of President Barack Obama’s stimulus package designed to lift the U.S. economy out of its deepest recession in decades.
No date is yet scheduled for the vote.
The House of Representatives voted along party lines last Wednesday to pass an $819 billion version of the bill. Not a single Republican voted in favor of the legislation.
The measure is expected to pick up at least some GOP support in the Senate.
The bill approved by the House has attracted criticism from Republicans and, privately, from some Democrats for spending billions of dollars on Democratic favorites like education despite questions as to whether they would really put people to work.
But with unemployment soaring, the banking industry crumbling despite billions of dollars of bailout money, and states struggling with budget crises, Democrats said the legislation is desperately needed.
Meanwhile, unemployment is expected to jump to 7.5% when figures for January are released on Friday. Last week some 65,000 jobs were slashed from companies as diverse as Starbucks (SBUX) and Caterpillar (CAT).
Car makers are expected to report more bad news on Tuesday when new vehicle sales are released. The numbers will likely show a 30% decline from a year ago and an 18% drop from December, according to auto Web site Edmonds.com.
Bad news is also expected from much of the retail sector, several of whom will report January sales on Thursday. Analysts are predicting 2.4% lower same-store numbers. If Wal-Mart (WMT) is excluded, those figures would show a 5.7% decline.
The heart of fourth-quarter earnings season is over, but investors will be looking at reports from United Parcel Service (UPS) on Tuesday, Kraft Foods (KFT) on Wednesday, and drug makers Merck (MRK) on Monday and Schering-Plough (SGP) on Tuesday.
Also next week are earnings from a handful of big insurers: MetLife (MET) on Tuesday; Prudential Financial (PRU) on Wednesday; and Hartford Financial (HIG) on Thursday.
Media companies reporting are: Walt Disney (DIS) on Tuesday; Time Warner (TWX) on Wednesday; and News Corp. (NWSA), parent company of Fox Business Network, on Thursday.