US EQUITIES WEEK AHEAD: Retailers Report Results, Fed Meets

The nation's retailers, which have yet to show signs of an improving economy, begin reporting fiscal second-quarter results next week.

When Federal Reserve officials meet Tuesday and Wednesday, they will discuss whether to continue programs aimed at relieving the credit crunch and the recession.

A key measure of inflation, the Consumer Price Index, is expected to remain flat for July when it is released next Friday.

 
   Wal-Mart Expected To Post Flat Results 
 

Wal-Mart Stores Inc. (WMT), the world's largest retailer and a component of the Dow Jones Industrial Average, is expected to report flat fiscal second-quarter earnings on Thursday. It is the first period in three decades that the company hasn't released monthly sales figures, so forecasts are murkier than in the past. Other retailers posting quarterly results include Macy's Inc. (M) on Wednesday; Kohl's Corp. (KSS) and Nordstrom Inc. (JWN), both Thursday; and J.C. Penney Co. (JCP) on Friday.

This week, retailers said same-store sales in July fell by their second-highest amount of the year. They also sliced 44,000 positions last month, more than twice the 21,000 positions shed in June.

 
   Fed To Weigh TALF Extension, Treasury Buys 
 

Federal Reserve officials will consider extending the Term Asset-Backed-Securities Loan Facility, or TALF, when they meet next week. The program was aimed at reviving consumer and business lending markets but reaction has been mixed as to its usefulness. Fed governors will gather with presidents of the Fed's 12 regional banks to also consider whether to extend a program due to expire in September to purchase $300 billion worth of long- and medium-term U.S. Treasury securities. Interest-rate policy is expected to stand pat.

 
   Consumer Prices Likely To Be Flat In July 
 

The Consumer Price Index, a key measure of inflation, is expected to be flat in July after a 0.7% increase a month earlier. Consumer prices have changed little this year.

Along with the CPI report next Friday, the government will release data on July industrial production and the Reuters/University of Michigan index of consumer sentiment will issue its preliminary figure for August. On Thursday, the government will report on July retail sales and June business inventories. Second-quarter productivity figures are due Tuesday, and the June report on the U.S. trade deficit will be out Wednesday.

 
   Chinese Solar Firms Likely To Post Losses 
 

Analysts expect Chinese-based solar companies JA Solar Holdings Co. (JASO), LDK Solar Co. (LDK) and ReneSola Ltd. (SOL) to swing to quarterly losses Wednesday, with LDK already saying it would write down inventory as the industry continues to be plagued by lower prices for solar wafers. While China's new subsidy for solar power plants is expected to help the industry, it won't alleviate the problem of excess capacity.

 
   SEC To Explain BofA Settlement In Court 
 

The Securities and Exchange Commission will have to defend in court its proposed $33 million settlement with Bank of America Corp. (BAC) over bonuses promised to Merrill Lynch & Co. employees last year. U.S. District Judge Jed S. Rakoff refused to sign off on the deal and is forcing the two sides to disclose in a court hearing Monday how they negotiated their agreement.

 
   UBS, US To Update Judge On Settlement Talks 
 

UBS AG (UBS) will update a federal judge Wednesday on the status of settlement talks with U.S. tax authorities seeking the names of 52,000 American UBS clients who may have evaded taxes. The Swiss bank and the U.S. government said last week that they had agreed in principle to settle the case. Absent a final settlement, U.S. District Court Judge Alan Gold will begin hearing evidence in the case Aug. 17.

 
   Republic, Southwest Likely To Bid For Frontier 
 

Republic Airways Holdings Inc. (RJET) and Southwest Airlines Co. (LUV) are expected to go head to head in an auction of Frontier Airlines Holdings Inc. (FRNTQ) on Tuesday in New York. Republic, a holding company for three regional airlines, offered $108.75 million in June for Frontier and its Lynx Aviation subsidiary. Last month, Southwest signaled its intent to bid on Frontier with an unbinding proposal of $113.6 million. The acquisition would give Southwest its first international destinations, make it the second-largest carrier by number of passengers in Denver and help it better compete against United Airlines, which controls nearly half of the Denver market.

 
   US, Mexican, Canadian Leaders Will Meet 
 

President Barack Obama will look to deepen economic engagement with his counterparts from Mexico and Canada at a two-day summit next week in Guadalajara, Mexico. The North American Leaders' Summit on Sunday and Monday will focus on preparing for the Group of 20 summit in September, coordinating the response to the H1N1 virus, addressing transnational criminal cartels, and collaborating on climate-change and clean-energy issues.

Meanwhile, officials of several South American countries are meeting in Ecuador to settle on a joint strategy to guarantee H1N1 vaccine's access to cover the region's needs among other topics.

 
   Clinton Continues Visits In Africa 
 

U.S. Secretary of State Hillary Clinton continues her seven-nation tour through Africa, visiting South Africa on Saturday, Angola on Sunday and the Congo on Monday. She concludes her trip in Nigeria on Tuesday and Cape Verde on Wednesday. In Kenya this week, she criticized the government for corruption and human-rights abuses.

 
   Conferences 
 

Among the significant conferences next week are the EnerCom Inc. Oil & Gas Conference from Sunday through Thursday in Denver; Pacific Crest Securities Technology Leadership Forum from Sunday through Tuesday in Vail, Colo.; CanaccordAdams Global Growth Conference from Tuesday through Thursday in Boston; Oppenheimer & Co. Communications, Technology & Internet Conference on Tuesday and Wednesday in Boston; and the Wall Street Research Small Cap Conference on Tuesday and Wednesday in New York.

-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357; [e-mail]

(Dow Jones Newswires staff contributed to this report.)