The peak of second-quarter earnings season continues next week,
with one-sixth of the Dow Jones Industrial Average components and a
quarter of the companies in the Standard & Poor's 500 Index are
scheduled to report.
Economic reports will detail June new-home sales and May home
prices, and the government will release its first calculation of
the second-quarter gross domestic product, a figure used to measure
the health of the economy.
The House will vote on health-care reform legislation next week,
and a Senate panel is scheduled to vote Tuesday on Sonia
Sotomayor's nomination to the Supreme Court.
Oil Giants' Profits Seen Down On Price Drop
Oil giants ConocoPhillips (COP), Exxon Mobil Corp. (XOM) and
Chevron Corp. (CVX) will report second-quarter results Wednesday,
Thursday and Friday, respectively. All are likely to post profits
far below a year earlier because oil prices have dropped sharply
from record highs last summer. Chevron said in an interim update
earlier this month that the benefits of recent increases in oil
prices will be "largely offset" by the effects of a weaker dollar
and poor refining margins.
Ad Decline Hurts Media Companies' Revenue
Media giants, which continue to suffer from declining
advertising and viewers moving to the Internet, are expected to
post lower revenue though Time Warner Inc.'s (TWX) profits are
likely to be higher. That company has spun off its cable business
and is preparing to do the same with its AOL Internet business,
which has weighed down results in recent quarters. Time Warner
reports Wednesday.
Viacom Inc. (VIA, VIAB), which reports Tuesday, is trying to
rejuvenate the performance of its film studio, Paramount Pictures,
with film franchises such as "Transformers," though analysts have
speculated the company may put the studio up for sale. Walt Disney
Co. (DIS), which reports Thursday, has seen its theme parks suffer
in the recession. But it has fast-growing cable network assets and
recently took a stake in the popular TV Web site, Hulu, and is
exploring ways to drive more ad and subscription revenue with
online content.
Telecom 2Q Results Likely To Be Mixed
Verizon Communications Inc. (VZ), the nation's largest phone
company, leads a batch of heavy hitters in the telecommunications
industry when it reports second-quarter results Monday. Phone
carriers have held up relatively well despite the recession. But
carriers that lack their own wireless network, such as Qwest
Communications International Inc. (Q), which reports Wednesday,
have fared less well as more customers switch to alternative
local-phone services.
On the same day, Sprint Nextel Corp. (S) is expected to post a
second-quarter loss. Investors will be watching whether Sprint made
progress in reducing the number of wireless customers who cancel
service. On Thursday, struggling Motorola Inc. (MOT), which makes
wireless phones and other telecom equipment, is expected to post a
loss and phone shipments of about 13 million, less than a third of
what it sold each quarter just a few years ago.
Health Insurers See Enrollments Fall
Health insurers WellPoint Inc. (WLP) and Aetna Corp. (AET) will
report second-quarter results Wednesday, with Cigna Corp. (CI)
posting results a day later. Falling enrollments have been a
problem as unemployment mounts, but so far the sector has avoided
the string of profit warnings seen late last year. WellPoint, the
nation's largest managed-care company by membership, sees only a
slight decrease in results from a year earlier. Aetna last month
cut its 2009 profit target while Cigna reaffirmed its forecast, but
cautioned the economy could put more pressure on enrollments.
Data On Home Sales, Prices, 2Q GDP
Economic reports next week are likely to show some improvement
in the housing market, with new homes sales in June expected to
rise from May and May home prices to be down less than in the
previous month. The government reports on new home sales Monday and
the Standard & Poor's/Case-Shiller index of housing prices in
20 major cities is out Tuesday.
The government's first figure on second-quarter gross domestic
product will be issued next Friday. Economists are predicting a
decline of 1.5%, compared with a first-quarter drop of 5.5%.
The private Conference Board reports on July consumer confidence
Tuesday, and the government's report on June durable goods is due
Wednesday. The Federal Reserve also will release its Beige Book of
regional economic conditions Wednesday. And regional manufacturing
reports are due Monday from the Dallas and Chicago Feds, Tuesday
from the Richmond Fed and Thursday from the Kansas City Fed.
Among appearances by Federal Reserve officials: San Francisco
Fed President Janet Yellen speaks Tuesday in Coeur D'Alene, Idaho,
and New York Fed President William Dudley speaks Wednesday in New
York.
House Likely To Vote On Health-Care Bill
House Energy and Commerce Chairman Henry Waxman, D-Calif., said
Friday the House will vote next week on health-care legislation
regardless of whether his committee approves the bill. Taking the
bill directly to the House floor - rather than first moving the
bill through the Energy and Commerce Committee - would circumvent
objections by fiscally conservative House "Blue Dog" Democrats who
have blocked the bill in committee.
Meanwhile, President Barack Obama will keep up his aggressive
push for health-care reform, traveling Wednesday to Raleigh, N.C.,
and southwestern Virginia.
Senate Panel To Vote On Sotomayor Nomination
The Senate Judiciary Committee is slated to vote Tuesday on the
nomination of federal appeals court judge Sonia Sotomayor to the
Supreme Court. After that, the appointment will move to the full
Senate floor. Five Republican senators have announced their support
for Sotomayor, while a large contingent of conservative Republicans
have announced their opposition, including Judiciary members Orrin
Hatch of Utah and John Cornyn of Texas.
'Cash For Clunkers' Kickoff Planned Monday
The government will launch a $10 million ad campaign to promote
the "Cash For Clunkers" program, which kicks off Monday with a
launch event in Washington, D.C. Cash-for-clunkers, formally known
as the Car Allowance Rebate System, will provide about $1 billion
in federal funds as incentive money. Eligible owners of gas
guzzlers will receive a credit if they turn them in and buy or
lease a new, more fuel-efficient vehicle.
FDA To Rule On New Diabetes Drug
The Food and Drug Administration is expected to decide by
Thursday whether to approve experimental diabetes drug saxagliptin
from Bristol-Myers Squibb Co. (BMY) and AstraZeneca PLC (AZN). An
advisory panel recommended approval in April. The drug, which the
companies propose to sell under the brand Onglyza, would be the
second in a new class of oral diabetes drugs known as DPP-IV
inhibitors. The first was Merck & Co.'s (MRK) Januvia, which
has performed well since its 2006 approval by FDA, generating $873
million in sales for the first six months of 2009. Onglyza also is
one of the tools Bristol is counting on to help weather the loss of
U.S. market exclusivity for its top drug, the blood thinner Plavix,
in 2012.
Also Thursday, the FDA's psychopharmacologic drugs advisory
committee will meet to review Schering-Plough Corp.'s (SGP)
application to market an antipsychotic, asenapine, which
Schering-Plough proposes to call Saphris. Leerink Swann analysts
believe FDA approval is likely. Merck stands to inherit the drug
with its pending acquisition of Schering-Plough.
Chrysler's New Board Will Meet
Chrysler Group LLC's all-new board of directors will discuss
critical issues - such as the challenge of rebuilding its
once-great brand image and introducing relevant new products -
during a three-day meeting starting Monday. It is the first such
gathering since Chrysler exited bankruptcy in June and merged the
majority of its assets with Fiat SpA (FIATY).
Treasury To Sell $205B In Securities
The Treasury will sell a record $205 billion in securities next
week. The amount is a record and the number of auctions held in a
single week is the most since 1985.
CFTC To Hold Hearing On Rule Changes
A key lawmaker, exchange executives and others will testify
Tuesday at the Commodity Futures Trading Commission's first hearing
to discuss possible new rules on speculative position limits and
hedge exemptions. Earlier this month, CFTC Chairman Gary Gensler
said the agency will consider imposing sweeping limits on trading
in oil, natural gas and other commodities. The agency also is
exploring whether certain traders - like swap dealers, index
traders and exchange-traded fund managers - should be allowed to
get around position limits through specially granted
exemptions.
U.S., South Korea To Discuss Trade Issues
South Korea and the U.S. will hold a two-day meeting in
Washington starting Monday to discuss pending trade issues,
including antidumping tariffs and technical barriers to trade. The
two countries signed a free trade accord in June 2007, but it
hasn't been approved by the legislature of either nation.
Conferences
Among the significant conferences next week are the Keefe,
Bruyette & Woods, Inc. Community Bank Conference from Monday
through Wednesday in New York, CapStone Investments 3rd Annual
Small Cap Investor Conference on Wednesday and Thursday in
Milwaukee, and Jesup & Lamont Securities Growth Stock &
National Sales Conference from Wednesday through Sunday in Boca
Raton, Fla.
- By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com
(Peter Loftus and other Dow Jones Newswires staff contributed to
this report.)