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THE WEEK AHEAD: Market looks for interest rate decision

Wall Street's latest interest rate watch culminates next week.

The Federal Reserve Open Market Committee next meeting is scheduled to meet Tuesday morning. Economists over the last several weeks generally have been predicting a half-point hike in the overnight lending rate.

Wall Street has been buoyed by recent economic data suggesting that the economy is cooling, meaning a lower risk of inflation. The latest estimates of growth for retail sales and the Producer Price Index were lower than expected.

But some Fed officials have been saying in recent speeches, congressional testimony and interviews that the accelerating growth of productivity -- the amount of goods and services produced for each hour worked -- also has lifted the bar for interest rates, according to the Washington Post.

"This expansion is being driven by investment, and in such a case real interest rates have to be higher than they otherwise would be in order to balance the demand for and the supply of investment funds," the Post quoted Fed Vice Chairman Roger Ferguson as saying in an interview.

Stock investment wasn't a happy endeavor during the few sessions.

The tech-heavy Nasdaq Composite Index ended the week at 3,529.07, or down 7.5 percent for the week, and would have ended even lower if not for rallies over the last two sessions that were largely attributed to short-covering, as opposed to a genuine change in sentiment. The S&P 500 finished the week at 1,420.96, a 0.8 percent drop from a week earlier.

Strong earnings from another tech stalwart might help the market regain more. Hewlett-Packard (NYSE: HWP) is scheduled to report its fiscal second quarter results Tuesday after market close. First Call's survey of 23 analysts predicts a profit of 82 cents per share.

Also set to report is Computer Associates (NYSE: CA), which said it will release fourth quarter results on Monday. The company expects results in line with analyst forecasts.

First Call consensus calls for earnings of $1.13 per share, excluding goodwill amortization. Earlier this week, CA spooked investors when the company said earnings would be reported later than expected.

Other tech and communications companies with quarterly reports scheduled for next week include: Agilent Technologies (NYSE: A); Ciena (Nasdaq: CIEN); and ADC Telecommunications (Nasdaq: ADCT).

On the other hand, a solid quarter is no guarantee of a positive market. Cisco Systems (Nasdaq: CSCO) this week reported a typical Cisco quarter, with revenue and earnings slightly ahead of estimates, yet the stock fell the next day.

However, the market was happy to reward Dell Computer (Nasdaq: DELL) for its better-than-expected industry_list.asp?mode=news&doc_id=ZE504194&pic=Yfirst quarter.>