Mideast Worries May Still Drive Stocks

U.S. economic data will be scant this week.

On Thursday, Wall Street will scrutinize the U.S. producer price index for May for signs of whether inflation is a problem. Friday, preliminary statistics on consumer sentiment from the University of Michigan will signal whether the American public is continuing to feel comfortable about spending.

The Federal Reserve’s “beige book,” an anecdotal report on regional and national economic conditions, also is expected this week.

On Thursday, the Commerce Department will report on retail sales probably falling slightly in May, and a report Friday on business inventories is expected to show a 0.2% decline in April from a 2 1/2-year low in March.

Despite indications of an improving economy, widespread mistrust of corporate management, fears of more violence in the Middle East and sluggish corporate profit growth will probably continue to conspire to drive stocks.

“The economic data does not seem to be driving this market,” Tim Ghriskey, a fund manager for Ghriskey Capital Partners, said. Wall Street “is more focused on the issues in Pakistan, India, Iraq and the Middle East in general, and potential terrorism on U.S. soil. Without something to distract investors from this, it will continue to overhang the market.”