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To: Jim Willie CB who wrote (15901)	4/23/2000 2:24:00 PM
From: Sully-	Respond to of 35685

Sunday April 23, 1:50 pm Eastern Time WALL STREET WEEK AHEAD - Markets to test inflation nerves By Ian Simpson NEW YORK, April 23 (Reuters) - U.S. markets still shaky from a recent inflation-wary sellathon face a possible one-two punch this week from new economic numbers that could point again to rising inflation. Wall Street also will be closely watching corporate profits. The parade of quarterly results has reached roughly its midpoint, and the so-far mostly robust results helped pull markets higher last week. Among economic numbers, Wall Street will focus on two that are among Federal Reserve Chairman Alan Greenspan's favourite measures of inflation: the preliminary Employment Cost Index and an initial reading for economic growth, both for the first quarter. Market watchers said if they came in higher than expected and raised the specter of higher interest rates, the data could help derail Wall Street's recovery. ``It sounds like a good week to take off, doesn't it?' said Jere Estes, chief investment officer at Investment Counsellors of Bryn Mawr, in West Conshohocken, Pa. The Bureau of Labour Statistics will report the Employment Cost Index, a gauge of wages, at 8:30 a.m. EDT (1230 GMT) Thursday. Economists polled by Reuters expect the measure to rise 0.9 percent, down from a rise of 1.1 percent in the last quarter of 1999. The Commerce Department will post a preliminary look at the first-quarter's Gross Domestic Product, also at 8:30 a.m. EDT Thursday. Economists forecast growth at an annual rate of 5.6 percent, cooling from a sizzling 7.3 percent rise the previous quarter. ``Those numbers will prove to be very important, especially employment costs,' said Joseph Barthel, chief investment strategist at Fahnestock & Co. in Great Neck, N.Y. Wall Street fears that rising wages and quickening economic growth could lead the central bank to raise interest rates more than expected in order to curb inflation. The Fed's rate-setting panel meets May 16. Fragile markets were shattered April 14 by news retail inflation in March -- the widely-watched Consumer Price Index -- raced ahead at the highest rate in more than five years. The news caused the technology-flavored Nasdaq composite index (^IXIC - news) to lose almost 10 percent that day, while the 30-share Dow Jones industrial average (^DJI - news) posted its biggest point loss ever. Buoyant earnings ``are the silver lining of the cloud' from the strong economy and hints of inflation, said Alan Skrainka, chief market strategist at Edward Jones in St. Louis. Research firm First Call/Thomson Financial said that as of late Wednesday, 228 of the Standard and Poor's 500 companies had reported first-quarter earnings. Of them, 72 percent had topped analysts' consensus estimates. Industries to be heard from for the first time in major numbers include oil producers, chemicals, railroads and insurance. Eight Dow components will report, with the big day Tuesday. Oil major Exxon Mobil Corp. (NYSE:XOM - news), chemical company DuPont Co. (NYSE:DD - news), local phone company SBC Commmunications Inc. (NYSE:SBC - news), drug maker Merck and Co. (NYSE:MRK - news) and adhesives maker Minnesota Mining and Manufacturing Co. (NYSE:MMM - news) all are to post earnings that day. biz.yahoo.com