Retail, inflation data expected

This week on Wall Street, investors will find out whether consumers’ worries about housing, jobs and rising prices are affecting their spending -- and, in turn, posing a further threat to the economy.

The market begins today with the Dow Jones industrial average back below 11,900 and having closed at its lowest level since October 2006.

Stocks were battered last week by another round of depressing news about the economy and the staggering credit market.

This week will have to bring milder readings on the economy, as well as positive signals from the credit markets and corporate America, for investors to regain any confidence. Stocks are at bargain-basement prices -- the question is whether investors will find reason to overcome their fears and start taking advantage of them.

The Commerce Department on Thursday releases its February retail sales report. After some mixed monthly sales figures last week from individual retailers, economists surveyed by Thomson Financial/IFR are expecting, on average, retail sales to have edged up by 0.2% after a 0.3% rise in January.

The government’s most recent reports have shown that spending is still technically on the rise, but not because consumers are buying more goods. If not for the rising cost of necessities such as food, gasoline and healthcare, consumer spending would have been flat in January and December.

These climbing costs are a big reason Wall Street is skeptical that interest rate cuts by the Federal Reserve -- which meets again next week -- are going to be enough to save the economy from recession.

If inflation cannot be controlled, Americans also facing sunken home prices will probably continue to have a hard time paying their bills.

On Friday, the Labor Department releases its gauge of consumer prices for February.

Economists are predicting a rise of 0.3% in the consumer price index, or a rise of 0.2% in the core index, which excludes food and energy costs. In January, consumer prices rose 0.4%, or 0.3% after stripping out food and energy.

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At a glance

Today

Quarterly earnings reports are due from Blackstone Group and Hovnanian Enterprises.

Tuesday

Commerce Department reports on international trade.

Quarterly earnings report due from Kroger.

Wednesday

Treasury reports on the federal budget.

Thursday

Commerce Department reports on retail sales and business inventories.

Labor Department reports on weekly jobless benefit claims.

Freddie Mac reports on mortgage rates.

Friday

Labor Department reports on the consumer price index.

Source: The Associated Press