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THE WEEK AHEAD: Microsoft, IBM ready for their turn

Some good economic news coupled with better-than-expected earnings reports from key technology firms pushed the Nasdaq to a record close this week. Now, Wall Street braces for more earnings reports.

For the week, the Dow Jones industrial average moved up 16 points to 11,209.84 while the Nasdaq shot up 71 points to 2,864.50.

Investors were encouraged by a report from the U.S. Labor Department showing the Consumer Price Index was unchanged in June after showing no change in May. Core CPI, which excludes food and energy prices, edged up just 0.1 percent in June after rising 0.1 percent in May.

Economists had predicted that CPI would gain 0.1 percent, while core CPI would rise 0.2 percent.

That bit of news will give Fed Chairman Alan Greenspan plenty to mull over before his semiannual Humphrey Hawkins testimony next week.

Apple Computer Inc. (Nasdaq: AAPL) might have had the most impressive earnings report this week. The PC maker beat analysts' estimates in its third quarter, raking in $114 million, or 69 cents a share, on sales of $1.56 billion.

First Call consensus expected it to earn 64 cents a share in the quarter.

Advanced Micro Devices Inc. (NYSE: AMD), Rambus Inc. (Nasdaq: RMBS) and CNet Inc. (Nasdaq: CNET) all topped analysts estimates. Intel Corp. (Nasdaq: INTC) and Seagate Technology Inc. (NYSE: SEG) both missed analysts' estimates, but even that bad news was offset by encouraging forecasts for the second half of the year.

"The spigot for earnings is flowing positively," said Alan Ackerman, senior vice president and market strategist for Fahnestock & Co. "But the real message of the market is there is some sense that the Fed might not raise rates in August because of the friendly CPI and PPI numbers."

This week's flood of earnings reports covers the entire information technology spectrum. There are also more than 20 technology-based initial public offerings to watch.

Of the big name companies reporting next week, International Business Machines Corp. (NYSE: IBM) will report its second quarter results Monday.

First Call consensus expects it to earn 88 cents a share in the quarter.

Last quarter, IBM raked in $1.5 billion, or $1.55 a share, on sales of $20.3 billion.

Its stock was trading around $137 a share Friday.

  • Microsoft Corp. (Nasdaq: MSFT) is another mammoth company reporting earnings Monday.

    First Call consensus predicts the software giant will earn 36 cents a share in its fourth quarter.

    Last quarter, it made $1.92 billion, or 35 cents a share, on sales of $4.33 billion.

    Microsoft should be even more interesting to watch after a federal jury in Connecticut Friday found that it did not violate U.S. antitrust law in a suit brought by a small Connecticut software company.

    While the eight-member jury found the world's leading software company liable for violating Connecticut business laws, it awarded nominal damages of only $1 to the plaintiff, Bristol Technology Inc.

    Microsoft shares hit a 52-week high of around $99 a share Friday.

    America Online Inc. (NYSE: AOL) will also check in this week with analysts expecting a profit of 11 cents a share.

    AOL, Amazon.com (Nasdaq: AMZN), E*Trade Group Inc. (Nasdaq: EGRP), Excite@Home Corp. (Nasdaq: ATHM), Texas Instruments Inc. (NYSE: TXN) and Citrix Systems Inc. (Nasdaq: CTIX) are just a handful of the technology companies to report this week.

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