Fresh Economic Data to Launch 2nd QuarterReports...

Fresh Economic Data to Launch 2nd Quarter

Reports this week on the nation’s employment picture and data on manufacturing could boost Wall Street’s taste for U.S. equities and help offset worries of higher oil prices and inflation in the face of Middle East violence.

The earnings season, when companies report quarterly profits and revenues, heats up next week. Until then, investors have little in the way of fundamental signals to guide stock purchases or sales. And reports of more violence in Israel are unlikely to shake investors into making big bets on stocks, fund managers say.

The second quarter of 2002 begins today with a trickle of first-quarter earnings reports. Companies expected to report include home-products retailers Best Buy Co. and Bed Bath & Beyond Inc. Among the 30 companies whose stocks make up the blue-chip Dow Jones industrial average, the first to report earnings will be Alcoa Inc., the world’s No. 1 aluminum producer, which issues its numbers Friday.

The week will bring a slew of fresh economic data.

* Today, the Institute for Supply Management issues its gauge of the U.S. manufacturing sector, which it calculates from order, production and inventory data.

* Today, a report on construction spending during February from the Commerce Department is likely to show that the building of homes and commercial structures is robust.

* Tuesday, the Commerce Department will report on manufacturers’ orders in February.

* Wednesday, the Institute for Supply Management issues data on the non-manufacturing sector.

* Friday, the Labor Department issues its nonfarm payrolls report, which is expected to show that the unemployment rate rose to 5.6% in March from 5.5% in February. A higher-than-expected jobless rate may slow the economic recovery.

* Friday, the Federal Reserve will report on consumer borrowing in February.

Reuters

Argentina Hopes for Aid Package After IMF Visit

Easter may have brought a welcome lull to Argentina’s smoldering social tensions, but a visit by an International Monetary Fund contingent this week could make or break a government desperate for billions of dollars in aid.

Daily protests of everything from deepening poverty to economic policy thinned as thousands of Argentines headed out of town for the five-day public holiday. Police reported only a handful of isolated, small-scale shop robberies and looting incidents.

But amid fears that unrest could flare into repeat scenes of the bloody rioting and pillaging that toppled the elected government late last year and left 27 dead, President Eduardo Duhalde faces a race against time to win international aid.

The IMF has hinted that aid could be around the corner if all goes well in negotiations with officials due to arrive in Argentina today. Argentina hopes the IMF will front a multibillion-dollar aid package to help end its grinding four-year recession.

Duhalde must restore confidence among international lenders and investors alike and contain the fears of a public that continues to scramble to seek refuge from the depressed peso--raising the specter of a return to Argentina’s hyperinflationary past.

Vice Economy Minister Jorge Todesca had said the government intended to raise export taxes on commodities, agricultural oils and flour to about 20% to help rake in an additional $1.2 billion to offset a sharp slump in tax revenues.

Investors, awaiting word on promised economic measures from the government, also will be looking to see if the central bank manages to stem the slide of the peso when local foreign exchange and stock markets resume trading Tuesday.

Reuters

Boeing, Air Force in Talks on Leasing 767s

Boeing Co., the No. 2 defense contractor, is beginning negotiations to lease as many as 100 767 passenger jets to the U.S. Air Force.

The jets will be converted to aerial refueling vehicles. Analysts estimate the potential value of the contract at $26 billion, though the company is offering to provide the aircraft for less than that, said Paul Guse, a company spokesman. Talks are to begin immediately.

Chicago-based Boeing is counting on the leases to help it weather a decline in its commercial aircraft business. The company said the airline slump brought about by the Sept. 11 terrorist attacks cost it almost $700 million in the fourth quarter.

Congress authorized the lease of the Boeing planes last year as a cost-effective way for the Air Force to replace its aging fleet of KC-135 tanker planes.

The Air Force solicited other proposals after EADS, a parent company of Airbus, objected. The Air Force later rejected an EADS proposal.

The Washington Post reported last week that the Air Force chose Boeing because of Airbus’ lack of experience in building tanker aircraft. Airbus, which is based in France, is the No. 2 plane maker.

Shares of Boeing, the largest plane maker, rose 92 cents to $48.25 on the New York Stock Exchange on Thursday. U.S. markets were closed Friday.

Bloomberg News

Also

* Today, the Institute for International Economics opens a two-day conference in Washington on proposals for an international bankruptcy process for countries.

Wednesday, the IIE releases its global forecast.

* Thursday, the National Telecommunications and Information Policy Administration opens its two-day Spectrum Management and Policy Summit in Washington.