Profit Reports Could Make for Shaky Week

Investors may want to get out the motion sickness medicine this week as the U.S. stock market is seen heading into choppy waters, uncertain about corporate earnings and interest rates. Wall Street breathed a sigh of relief Friday after a tame U.S. employment report for July that indicated red-hot U.S. growth was cooling, soothed fears the Federal Reserve may boost interest rates yet again this month. But earnings reports from technology bellwether Cisco Systems and closely watched data on retail sales and inflation could conspire to whipsaw stocks in an otherwise dull summer market, experts said. The Fed is scheduled to meet next on Aug. 22 to decide whether it will raise rates for what would be the seventh time since June 1999.

The flow of companies issuing corporate scorecards begins to slow to a trickle this week, but a few closely watched technology heavyweights will be in the spotlight. Networking giant Cisco reports its fourth-quarter results Tuesday, and analysts were upbeat about its prospects. On Wednesday, Dell Computer Corp. issues its second-quarter results. Semiconductor equipment company Applied Materials Inc. also announces its third-quarter earnings Wednesday. The computer chip industry has been rattled in recent weeks by worries about the sector’s profit prospects in the second half of the year.

Major discount retailers Wal-Mart Stores and Kmart Corp. are due to issue second-quarter earnings this week. And apparel retailer Gap Inc. reports Thursday.

Also this week, BP Amoco, the third-largest publicly traded oil company, will likely become the industry’s latest to report a record second-quarter profit because of takeovers and a surge in oil prices.