Third Quarter Reporting Continues Driving the Market

As we head into the third week of October, reporting of third quarter results is set to start speeding up, with investors having great expectations spurred on by better than expected reports thus far. Of the 135 Standard & Poor’s 500 companies due to report this week, some of the more high-profile include Apple on Monday, with Tuesday featuring Caterpillar, DuPont, Coca-Cola, Pfizer, United Tech and Yahoo. Wednesday sees reports from eBay and Wells Fargo, with Thursday’s highlights including 3M, Merck, AT&T, Amazon and American Express and Friday featuring Microsoft. The S&P 500 has rallied close to 61 percent since hitting a 12-year low on March 9, while the Dow has rallied by nearly 53 percent, topping the key psychological level of 10,000 twice during last week.

The week starts off with Federal Reserve Chairman Ben Bernanke addressing issues relating to Asia and the financial crisis at a meeting to be held at the Federal Reserve Bank of San Francisco. Tuesday sees the release of the Producer Price index (PPI) before the start of stock market trade. It is anticipated that this measure of wholesale inflation will remain essentially unchanged for September while the core PPI, which removes volatile elements such as food and energy prices, is likely to have risen 0.1 percent for last month. Housing starts and building permits for the month of September are due on Tuesday as well and are expected to have risen to 610,000 and 590,000 respectively measured as a unit annual rate.

Wednesday’s highlights include weekly crude inventories, as well as a state-by-state analysis of unemployment rates and the release of the Federal Reserve’s Beige Book survey on the economy. The Labor Department’s weekly jobless claims report is due before start of trade on Thursday with an anticipated 517,000 new claims being filed for unemployment compared to the 514,000 claims in the previous week. Also on Thursday, the Conference Board’s index of leading economic indicators is likely to have risen 0.9 percent. The week draws to a close with Bernanke speaking at a conference at the Federal Reserve Bank of Boston where the focus will be on financial regulation and supervision after the financial crisis. With governments world-wide, including the US government, debating as to when and how would be the best time to withdraw financial “bail-out” support from the financial sector, investors will no doubt be keen to hear any direction given in this regard.