U.S. stocks are expected to rise next week, as quarterly reports from Apple Inc. and International Business Machines could help fuel the fever for technology stocks. The holiday-shortened week will also be packed with data on inflation, housing and manufacturing.
Traders will have just four days to work through a stack of economic reports. Equity markets will be closed on Monday for the Martin Luther King, Jr. holiday. The producer price and consumer prices reports for December are due from the Labor Department on Wednesday and Thursday. Economists polled by MarketWatch expect the producer price index to fall to 0.7%, after a surprise 2% in November. Excluding food and energy prices, the core PPI is expected to edge up 0.1%, after a 1.3% reading a month ago. Consumer prices, meanwhile, are expected to tick up 0.5% compared with November when prices were flat. Expectations the Federal Reserve may cut rates soon fell this week after some stronger-than-expected data. July fed funds futures implied a 26% chance that the bank will lower its target for overnight rates to 5% from 5.25% by its meeting in late June, following upbeat retail sales data Friday. Investors will listen for any insight on the direction of interest rates on Thursday, when Federal Reserve Chairman Ben Bernanke testifies before the Senate's budget committee about long-term fiscal challenges facing the U.S. The Fed's view of economic conditions around the country will also come in the form of its Beige Book report, due Wednesday. Tech talk The shift into tech shares and out of weakening energy stocks picked up steam after Apple unveiled its long-awaited iPhone at its Macworld conference in San Francisco this week to much fanfare. However, Apple's high-end mobile device and its suppliers aren't the only drivers of tech stocks, said Robert Pavlik, chief investment officer at Oaktree Asset Management.
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