Investors await data on spending, jobs

Corporate America’s strong profits helped drive the Dow Jones industrials past 13,000 for the first time last week, but investors will want to see whether U.S. consumers also have financial muscle before pushing stocks much higher.

In addition to more earnings figures, market participants will be examining this week’s data on personal spending and the job market.

Now that the Dow has gained more than 760 points since April began, some investors are proceeding cautiously -- upcoming data that show the economy is slowing too quickly or that inflation is getting out of control could trigger a sell-off.

Inflation keeps the Federal Reserve from lowering interest rates, which would boost spending.

Currently, though, Wall Street is optimistic: First-quarter earnings data have shown about two-thirds of Standard & Poor’s 500 companies beating analyst estimates, and most economic data have presaged cooling growth but not recession.

Even a lower-than-expected reading on first-quarter gross domestic product failed to stifle the Dow’s climb Friday, and the blue-chip index hit its 37th record close since October.

The Dow was up 1.2% for the week, while the S&P; 500 index grew 0.7% and the Nasdaq composite index gained 1.2%.

The Labor Department reports today on personal spending, income and core personal consumption expenditures inflation -- a gauge of the cost of living.

The market expects that personal income for March rose 0.6%, the same as February; personal spending rose 0.4%, lower than the 0.6% in February; and core personal consumption expenditures inflation was 2.1% year-over-year, down from 2.4% the previous month, according to the median estimate of economists surveyed by Thomson Financial.

On Friday, the Labor Department reports on nonfarm payrolls and unemployment. Economists forecasted that nonfarm payrolls rose by 135,000 in April, less than 180,000 in March, and that the unemployment rate rose to 4.5% from 4.4%.

Today, in addition to personal spending and income, investors will be looking at the Chicago purchasing managers’ index of regional manufacturing and the Commerce Department’s construction spending report. Economists expect the April purchasing managers’ index to fall to 52.0 from 61.7 in March, and March construction spending to edge up 0.3% after a similar gain in February.

On Tuesday, the Institute for Supply Management releases its index on U.S. manufacturing. Economists expect the April index to come in at 51.0, indicating slow expansion.

Also Tuesday, the National Assn. of Realtors reports on pending sales of existing homes in March, and automakers release their April sales.

Wednesday, the Commerce Department reports on factory orders, which the market is expecting to have risen 1% in March after a similar gain a month earlier.

Thursday, the Labor Department releases its measure of worker productivity, and the Institute for Supply Management releases its service sector index.

Economists forecast that productivity rose 1.1% in the first quarter, less than the 1.6% gain in the fourth quarter.

*

At a Glance

Today

Commerce Department reports on personal income and spending, as well as construction spending, all for March.

Treasury bill auction.

Quarterly earnings reports due from Hilton Hotels, Centex, Humana, Kellogg, RadioShack, Tyson Foods, Verizon Communications and Wm. Wrigley.

Tuesday

Automakers release their sales figures for April.

Quarterly earnings reports due from DreamWorks Animation SKG, Archer Daniels Midland, Avon Products, MetLife, Procter & Gamble, Qwest Communications and Yum Brands.

Wednesday

Commerce Department reports on factory orders for March.

The Institute for Supply Management reports on manufacturing for April.

Quarterly earnings reports due from Blockbuster, MasterCard, Phelps Dodge, Starbucks and Time Warner.

Thursday

Labor Department issues preliminary reports on productivity and costs for first quarter 2007.

Labor Department reports on weekly jobless claims.

Freddie Mac reports on mortgage rates.

Senate Transportation Committee holds hearing on fuel economy.

House Labor panel holds hearing on pensions.

Quarterly earnings reports due from Gemstar-TV Guide International, Cablevision Systems, CBS, Electronic Data Systems, General Motors and International Paper.

Friday

Labor Department reports on employment for April.

Quarterly earnings reports due from Eastman Kodak, Washington Post and Weyerhaeuser.

--

Source: Times staff and wire reports