THE WEEK AHEAD: Oracle, Micron highlight tech earnings

Wall Street developed a split personality this week in reacting to the much-anticipated Consumer Price Index report. While the CPI numbers were tamer than expected, analysts were still mixed on whether the Fed will still raise interest rates later this month.

Traders can expect the "Fed watch" to escalate next week ahead of its meeting June 27 and 28. Some experts are convinced the economy has already slowed enough for the Fed to stand pat, citing the CPI, slumping new home sales and a slackening employment market.

The expiration of options on stocks and futures added a little extra zing to selling Friday as investors continue to eye depressing profit warnings and a perceptible decline in consumer spending and new home purchases.

Construction starts on new homes and apartments tumbled in May to their lowest level in nearly a year as rising credit costs sapped the economy's most interest-rate-sensitive sector.

The CPI rose slightly -- up 0.1 percent in May, less than the 0.2 percent increase expected. The tame data failed to excite investors though, perhaps because of rising oil prices.

"The CPI was good news," said Paul Christopher, economist at A.G. Edwards & Sons. "It's pretty clear now that the Fed can go into the June meeting with the leeway to sit on its hands for at least another six weeks and give their previous rate hikes a chance to do their job."

Construction starts on new homes and apartments tumbled in May to their lowest level in nearly a year as rising credit costs sapped the economy's most interest-rate-sensitive sector.

For the week, the Dow Jones industrial average slipped 165 points to 10,449.30 while the Nasdaq composite trimmed 14 points to end at 3,860.54.

Strong earnings reports this week from Adobe Systems (Nasdaq: ADBE), Red Hat (Nasdaq: RHAT) and Jabil Circuit (NYSE: JBL) were offset by profit warnings from the likes of Citrix Systems (Nasdaq: CTXS), Perot Systems (NYSE: PER) and Corel (Nasdaq: CORL).

Looking ahead to next week, several key technology companies will report their quarterly results.

Leading the charge will be Micron Technology (NYSE: MU), a chipmaker that missed analysts' estimates last quarter because of slumping DRAM prices but is still expected to post strong earnings this time around.

A survey of analysts by First Call Corp. pegs Micron for a third-quarter profit of 34 cents a share.

Last quarter, it earned $161 million, or 58 cents a share, on sales of $1.4 billion.

Micron Electronics (Nasdaq: MUEI), the PC maker, got a boost ahead of next week's earnings report when Lehman Brothers analyst Dan Niles raised his fiscal 2000 earnings estimate from 28 cents a share to 33 cents a share.

Micron Electronics is expected to post a profit of 3 cents a share in its third quarter.

Finally, there's Oracle (Nasdaq: ORCL).

Analysts are expecting the database software titan to earn 25 cents a share in its fourth quarter.

Last quarter, Oracle raked in $498 million, or 17 cents a share, on sales of $2.4 billion.