Now that investors know how


Chairman Alan Greenspan spent his summer vacation, analysts say investors will spend the coming week focusing on "oil, earnings and the Olympics."

After raising the federal funds rate this past Tuesday to 1.5% from 1.25%, the second hike of the summer following a four-year layoff, Chairman Greenspan and company move to the sidelines until September. That leaves investors to mull over next Tuesday's consumer price index (CPI) to see whether the chairman was correct in July when he called the surge in oil prices and its impact on inflation as "transitory," and whether the slowdown in consumer spending is evident in a spate of retailer earnings due out.

Economists expect the July CPI to show a 0.1% gain compared with a 0.3% one in the prior month. The consensus estimate for the core rate, which excludes the volatile energy and food sectors, is 0.2%, up from 0.1% in June.

"If the CPI comes in lower than it did last month it's a good sign because at least we are not seeing an upward push from inflation," says Sam Stovall, chief strategist at S&P.

Stovall says the lack of economic data next week will make the direction of oil prices a even greater factor, especially with traders keeping a close eye on the Olympic games for any signs of terrorism.

While the Olympics revolve around the pursuit of precious metals -- gold, silver and bronze -- analysts like Stovall and Wachovia's Brian Piskorowski say the games will take a unique place in traders' minds now that oil prices are said to include a terror premium of $5-$10 a barrel. Oil prices, now comfortable in the $40 range, pierced $46 for the first time this week due to sabotage attacks on Iraq's infrastructure and the unfolding and unpredictable tax battle between Russian oil titan


and Moscow.

"There's not much data out and it's also a big vacation week, so geopolitical issues like the Olympics and Iraq will remain at the forefront," says Piskorowski who also warns that fewer traders at work can lead to increased volatility should an unforeseen event occur.

The higher price of oil and its potential drag on the consumer along with a series of high profile, high tech earnings warnings helped drag the markets lower this week, with all the major indices setting new 2004 lows. An impressive earnings report from computer manufacturer


(DELL) - Get Report

did little more than stop the bleeding.

Consumer spending has been dampened by rising energy prices this summer, but


(WMT) - Get Report

still managed to report an 8.6% increase in profits, beating Wall Street projections by a penny. Retail sales as measured by the government, however, rose less than expected in July after declining 0.5% in June.

Analysts will be looking at a wide range of retailers next week to see how higher prices at the pump are affecting shoppers' discretionary spending. Retail earnings on Monday include discounters


( KMRT) and

Lowe's Companies

(LOW) - Get Report


At Lowe's, analysts are calling for a profit of 91 cents a share, up from 75 cents a share or 21% in the year-earlier period. Analysts are calling for Kmart to earn 14 cents a share on $4.8 billion in sales in the company's first full calendar year of operations after emerging from bankruptcy in May 2003.

On Tuesday, a second set of retailer earnings features

BJ's Wholesale Club

(BJ) - Get Report


Home Depot

(HD) - Get Report


J.C. Penney

(JCP) - Get Report





The TJX Companies

(TJX) - Get Report


Finally, on Thursday,


(GPS) - Get Report


Limited Brands


will let analysts grade their results in the final quarter ahead of the back-to-school rush.

Marie Driscoll, a retail analyst at S&P, does not expect increased energy prices to seriously affect the profits at higher end retailers whose patrons can easily afford them. Driscoll, however, does see the discounters and low-end stores potentially being hurt by oil at $45 a barrel, because "it eats up a disproportionate amount of their customer's income."

Finally, technology investors looking for some indication that the worst is behind them will hear from semiconductor supplier

Applied Materials

(AMAT) - Get Report

on Tuesday. The semiconductor index fell over 7.5% last week after a disappointing sales estimate from tech giant


(CSCO) - Get Report

and a warning from


(HPQ) - Get Report

severely dragged down the sector.

Analysts expect Applied Materials to earn 25 cents for the quarter on $2.14 billion in revenue, up from 5 cents and $1.09 billion a year ago. Analysts expect Applied Materials to earn 25 cents for the quarter on $2.14 billion in revenue, up 5 cents and $1.09 billion a year ago.