Economy fears drag down Wall Street

MARKET OUTLOOK

- US: US markets fell week-on-week after hitting new yearly highs for the Dow Jones and S&P500 on concern about a slowing economy next year. The yield curve remains inverted, plus the housing market is slowing. Last week stocks from the automobiles and compo., semiconductors and health care equipment sectors fell most, while shares in the telecom. services, house. and personal prod. and media sectors traded on the upside. As expected the FOMC left Fed Funds unchanged. Technically, the risk this week is a break of the rising 20 day moving averages on the Dow and S&P which should trigger a consolidation. Watch home sales data and personal spending.

- EUROPE: European markets consolidated last week. Stocks from the industrial goods, basic resources and utilities pushed markets down while shares from the travel & leisure, financial services and telecom sectors managed to gain. Technically, unless European indices rise through their last week high, the risk is a consolidation this week. On the economic front, watch tomorrow's IFO data in Germany. On Thursday there will be unemployment data in Germany and, on Friday, France will report its job data.

COMPANY PREVIEW

Walgreen (USD 46.9 ; -6.13% ; WAG ; WAG.N)

Walgreen should report on Monday pre-market 4Q/Aug EPS of $0.41 ($0.35 a year ago) on a revenue of $12bln ($10.495bln) thanks to increasing traffic and new store openings. The stock fell sharply last week on reports Wal-Mart would lower generic drug prices.

Paychex (USD 35.44 ; -1.34% ; PAYX ; PAYX.O)

Paychex is expected to deliver Tuesday after market closes 1Q/Aug EPS of $0.34 ($0.30 a year ago) on a revenue of $461.6m ($403.7m). Watch data for client base growth and retention rates.

CNP Assurances (EUR 79.95 ; -0.13% ; CNP ; CNPP.PA)

CNP Assurance reports on Tuesday 1H results. Last year, CNP reported 1H net income of E386.8m. On August 4, the group delivered 1H sales up 38% to E16.3bln. On September 21, the group announced its plans to quadruple its insurance distribution outlets in China to 300 by the end of 2006 to catch up with AIG and other rivals.

Hennes and Mauritz (B) (SEK 292 ; -1.68% ; HMB ; HMb.ST)

Hennes and Mauritz delivers on Wednesday 3Q/Aug results. The market expects EPS of SEK2.94 (SEK2.61 a year ago), net income of SEK2.439bln on revenue of SEK17.24bln (SEK15.15bln). On September 21, the company announced it opened its first store in Kuwait.

Micron Technology (USD 17.46 ; -3.38% ; MU ; MU.N)

On Friday Micron Technologies should report 4Q/Aug EPS of $0.13 ($0.07 a year ago) on a revenue of $1.41bln ($1.257bln). On September 20, the group was cut to 'hold' from 'buy' at Citigroup.