Nervousness about corporate bookkeeping will undoubtedly continue to feature on Wall Street in the coming week. Analysts are increasingly hoping, however, that the paranoia clears up enough long enough for more traditional gauges of economic health to return to focus.

"Considering the Dow was down every day this week before Friday, the market is looking a little oversold," said Peter Boockvar, market strategist at Miller Tabak. "Assuming there aren't any bombs dropped, we should have an upward bias next week."

Post- Enron, a slew of large companies have seen their accounting come under scrutiny, sparking fears that shady accounting is inflating earnings all across corporate America. The major indices have closed lower during five of the last six sessions: between Jan. 31 and Feb. 7, the Dow Jones Industrial Average lost 3.0%, the Nasdaq Composite dropped 7.8% and the S&P 500 fell 4.4%.

Stocks finally rallied on Friday, with the Dow tacking on 1.2% and the Nasdaq gaining 2.1%. Some analysts say the five-day selloff was overdone.

"Sell first and see if there is a problem later," was the rule on Wall Street last week, says Boockvar. And, if new accounting issues keep surfacing, the market will continue to suffer. But "the hope is that the high-profile names have already come out of the closet." If so, investors may be content to focus their scorn on the existing troubled names and spare the broader market further bloodletting, he said.

Morgan Stanley Dean Witter technical analyst Jonathon Dodd said he's also "looking for some rally effort" next week, but that a move up may come on the heels of further moves down at the beginning of the week. "I would like to see stocks move down a bit more. That would set up a rally better," he said.

High Hopes

Following weeks of positive economic data, investors are growing increasingly confident that the economy is getting back on its feet, and they will want to see confirmation of that trend from the January retail sales report Wednesday, weekly jobless claims Thursday, and the January consumer sentiment index Friday, analysts said.

And while fourth-quarter earnings season is almost over -- some 81% of the S&P 500 has already reported earnings this quarter -- investors will pay close attention to a trio of tech companies next week. Chip-equipment leader Applied Materials ( AMAT) reports earnings Tuesday, and PC makers Hewlett-Packard ( HWP) and Dell ( DELL) report Wednesday and Thursday, respectively.

Both Dell and Hewlett-Packard recently raised their guidance for the quarter ended January, citing stronger consumer demand, so the quarterly numbers shouldn't be much of a surprise. But investors will listen for word on the outlook for 2002.

At the end of last month, Dell raised fourth-quarter revenue guidance to $8 billion from $7.6 billion and its earnings estimate to 17 cents a share from 16 cents. And Hewlett-Packard said last week that it now expects fiscal first-quarter revenue to beat rather than slip below the fourth quarter's $10.9 billion. The company also said it would top earnings estimates of 16 cents a share. Analysts now expect earnings of 25 cents a share for the quarter and $1.04 for the full year, on average, according to Thomson Financial.

Applied Materials, meanwhile, is seen posting a penny loss for its fiscal 2002 quarter, and a 21 cent-a-share profit for the full year.

Purse Strings

The monthly retail sales report is a key piece of the economic puzzle after surprisingly strong consumer spending in the fourth quarter pushed GDP into positive territory. Few economists think the U.S. consumer can keep spending at last quarter's pace, as most of the jump in spending was driven by record vehicle sales, which have since declined. Economists pay closest attention to retail sales excluding auto sales, because the monthly vehicle sales numbers have already been released. According to consensus estimates, economists expect a 0.2% increase in January retail sales excluding autos, compared with a 0.1% decline in December.

But that increase reflects stabilizing gas prices, rather than a real rise in spending, said Josh Feinman, chief economist at Deutsche Asset Management Americas. The retail sales number is not inflation-adjusted, and falling gas prices depressed the spending number in December. Including autos, economists expect retail sales to fall 0.2%, vs. a 0.1% drop the previous month.

New jobless claims, which have been declining since October, are expected to slide to 360,000 for the week ended Feb. 9 from 376,000 the previous week. Feinman says that would be a good sign that the labor market has stabilized.

The University of Michigan consumer sentiment index, meanwhile, is seen climbing to 94.3 in February from 93.0 in January. Feinman says recent improvement in the expectations component of that index might hit a wall because of the recent drop in stock prices and the accounting concerns, but that the current conditions component could improve.

January industrial production, which has been contracting at a slower place in recent months, is also released Friday, and is expected to be flat vs. a 0.1% drop in December.

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