US EQUITIES WEEK AHEAD: 2Q Reports Begin; Inflation Data Due

9th Jul 2010 18:54

By Kathy Shwiff Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--The second-quarter earnings season begins Monday with a report by Alcoa Inc. (AA), the first blue-chip company to detail results through June. Little to no signs of inflation are expected when the U.S. government issues its June producer price and consumer price indexes Thursday and next Friday, respectively. The financial reform bill could go to the whole Senate for a vote next week as Congress returns from its recess. Companies' 2Q Results Seen Improving Second-quarter results are likely to show companies continue to mend their bottom lines while struggling with cautious consumers, tougher comparisons and unfavorable currency fluctuations. Aluminum giant Alcoa reports Monday afternoon, followed later in the week by semiconductor maker Intel Corp. (INTC), search-engine giant Google Inc. (GOOG) and conglomerate General Electric Co. (GE). Also scheduled to report are large banks J.P. Morgan Chase & Co. (JPM), Citigroup Inc. (C) and Bank of America Corp. (BAC). Chip Makers Likely Saw Strong Demand Semiconductor makers Intel and Advanced Micro Devices Inc. (AMD), which report Tuesday and Thursday, respectively, likely benefited from a continued recovery in demand for computers and other electronic devices in the latest quarter. Analysts predict both companies will swing to second-quarter profits as they compete to increase their market share. Eyes On Google's Recruitment Spending Google's second-quarter results are seen improving from a year earlier after the previous quarter solidly confirmed the return of large advertisers. When the Internet-search giant reports Thursday, investors will be watching its spending on recruiting new employees and on its costs per click and online-ad pricing, which appeared to be under strain as the company expands its geographic footprint. PPI, CPI Expected To Show Little Inflation Economists expect no change in consumer prices while wholesale prices may have inched up 0.1% in June, according to forecasts for the Consumer Price Index, due next Friday, and Producer Price Index, out a day earlier. The trade deficit for May, to be released Tuesday, also is seen flat with April's. It has been at about $40 billion since February. The government will report on June retail sales and May business inventories Wednesday, when the Federal Reserve releases minutes from its latest meeting on interest rates. June industrial production figures are due Thursday, the same day that the New York and Philadelphia Feds will report on regional manufacturing activities. A preliminary reading of the Reuters/University of Michigan consumer sentiment index for July will be out next Friday. Among appearances by Federal Reserve officials: Richmond Fed President Jeffrey Lacker will speak Monday in Richmond and Thursday in Norfolk, Va. On Thursday, the Senate Banking Committee holds a hearing on the nominations of Janet Yellen to be vice chair of the Federal Reserve Board of Governors and Peter Diamond and Sarah Bloom Raskin to be board members. Fed Sponsors Small-Business Conference The Federal Reserve will hold a conference Monday on financing for small businesses. Chairman Ben Bernanke is scheduled to make opening remarks. The Fed is sponsoring the event to discuss strategies to improve access to credit for small businesses. Fed Holds Hearing On Mortgage Disclosures The Federal Reserve Board will hold Thursday in Atlanta the first of four public hearings on potential revisions to the its Regulation C, which implements the Home Mortgage Disclosure Act. The Fed has asked for input on possible changes in the law, which requires mortgage lenders to provide detailed annual reports of their lending activity to regulators and the public. Senate Could Vote On Financial Reform Bill The financial-overhaul bill could come to the Senate floor as soon as next week, when the Senate returns from a one-week recess. Democrats and White House officials likely need the support of at least two Republicans to secure the 60 votes necessary to block a potential filibuster. The House has passed the bill, and Senate approval is necessary for it to become law. SEC To Vote On Shareholder Voting Study The Securities and Exchange Commission is slated to vote next week on a "concept release" that will study the mechanics of shareholder voting, sometimes called "proxy plumbing." The idea is to open a dialogue about how the proxy voting system can be made more accurate and transparent. Chairman Mary Schapiro said the commission will take a particular look at proxy advisers. FDA Panel To Weigh Menthol Cigarette Effects A Food and Drug Administration panel will consider the health impacts of mint flavoring in cigarettes Thursday and next Friday in a move that could lead to limiting or banning menthol cigarettes. The issue is of central importance to the tobacco industry because menthol cigarettes account for roughly one-third of the $70 billion U.S. cigarette market. The panel is expected to hold one or two more full committee meetings before it issues a final recommendation to FDA commissioners next March. FDA Panel To Vote On Diabetes Drug Avandia A Food and Drug Administration advisory panel will meet Tuesday and Wednesday to discuss the safety of GlaxoSmithKline PLC's (GSK, GSK.LN) diabetes drug Avandia and vote on whether Avandia should remain on the U.S. market. According to agency documents prepared for the meeting, FDA staff scientists continue to question Avandia's safety, which has been in question since a 2007 article in the New England Journal of Medicine by Cleveland Clinic cardiologist Steven Nissen showed the product raised the risk of heart attacks by more than 40%. Senate Panel Expected To Confirm Kagan The Senate Judiciary Committee is expected to confirm the nomination of Elena Kagan to the Supreme Court in a vote next week, moving the matter to the full Senate. Kagan, who is U.S. solicitor general and a former dean of Harvard's law school, is President Barack Obama's second pick for a top court and would replace retiring Justice John Paul Stevens. Greece To Auction 26-Week Treasury Bills Greece on Tuesday will auction its first Treasury bills since accepting a bailout in May, marking a test of whether international investors are willing to buy its debt. But in a sign that the government isn't willing to pay any price for funds, it is auctioning only 26-week bills, rather than both 26-week and 52-week bills. Spain, Netherlands In World Cup Final Sunday A new World Cup champion will be crowned Sunday in Johannesburg, South Africa, after the final game between Spain and the Netherlands. The winner will join seven other nations that have held that title. The Netherlands won each of its matches in this year's competition and returns to the final for a third time. Spain, which lost its opening match to Switzerland, is in its second final. Conferences Among the significant conferences next week are the Microsoft Worldwide Partner Conference from Sunday through Thursday in Washington, D.C.; Global Hunter Securities China Conference from Sunday through Tuesday in San Francisco; Semicon West from Tuesday through Thursday in San Francisco; and the Bank of America Merrill Lynch Health Care Conference on Wednesday in Washington, D.C. -By Kathy Shwiff, Dow Jones Newswires; 212-416-2357; [email protected] (Dow Jones Newswires staff contributed to this report.) (END) Dow Jones Newswires July 09, 2010 13:54 ET (17:54 GMT)