Dow Jones erases annual gain

MARKET OUTLOOK

- US: US stocks fell for a second week, erasing this year's gain in the Dow Jones Industrial Average, as semiconductors stocks including Intel slumped. The Dow Average had its steepest weekly drop in two months amid concern a fourth quarter advance has gone too far.

The Fed's next meeting is scheduled for December 13 and the market is looking for another 25bps hike to 4.25%. This week's key economic data to watch will be tomorrow's November advance retail sales, Wednesday's October trade balance and Thursday's November Import Price Index.


- EUROPE: European stocks last week were little changed near four-year highs as a month-long rally faltered. European chemical and car-related stocks slid for the week as oil touched the highest in almost a month.

On the economic front watch today's November UK PPI Input, tomorrow's November consumer price Index for France and Germany December ZEW Survey, and Friday's Euro-zone November CPI. industrial production (France) Technically, the FTSE 100, Dax and Cac 40 remain above their 20 & 50D MAs and keep upside momentum.


COMPANY PREVIEW

Inditex (EUR 25.5 ; 0.75% ; ITX ; ITX.MC)

Tuesday Inditex publishes 3Q results, In addition to earnings data, the market is awaiting details on how the group's cost cutting exercise is running as well as an initial outlook on the pre-Christmas collection.


Freddie Mac (USD 63.4 ; 0.8% ; FRE ; FRE.N)

On Wednesday Freddie Mac releases its 3Q earnings. The market is looking for $1.02 profit per share compared to a loss per share of $2.25 same period last year. The agency's CEO predicted a slowdown in housing starts for 2006 as the housing market cools.


Oracle (USD 12.5 ; -2.04% ; ORCL ; ORCL.O)

On Thursday Oracle publishes its 2Q results. The company is expected to have recuperated from its disappointing first quarter, with EPS expected to rise $0.03 to $0.19 compared to same time last year, on revenue of $3.41bln up from $2.76bln.


Goldman Sachs (USD 129.66 ; -1.08% ; GS ; GS.N)

On the same day, Goldman Sachs reports 4Q earnings. The market is looking for a profit of $3.30 per share, up from $2.36 this time last year on revenue of $5.8bln ($7.45bln). The company agreed to purchase a 33% stake in Sanyo's finance-unit Sanyo Electric Credit for $192m.


Carnival (USD 54.57 ; -2.55% ; CCL ; CCL.N)

And finally on Friday, Carnival discloses its 4Q results. The company's earnings forecast remained unchanged, between $0.39 and $0.41 per share, even though the hurricane season could cut into the profits by $0.01.