LGI Homes files for $125 million IPO as U.S. housing market recovers

n">(Reuters) - Homebuilder LGI Homes Inc filed with U.S. regulators on Wednesday to raise up to $125 million in an initial public offering, at a time when the recovery in the U.S. housing market picks up pace.

LGI Homes started in 2003 and currently builds entry-level homes that are priced between $115,000 and $260,000 in Texas, Arizona, Florida and Georgia.

U.S. homebuilder confidence neared an eight-year high in August as strong demand for and the limited supply of new and existing homes outweighed higher mortgage rates, data from the National Association of Home Builders showed.

LGI Homes' revenue nearly tripled to $143.4 million in 2012 from 2010, the company said in a filing with the U.S. Securities and Exchange Commission. (link.reuters.com/tyt62v)

The Woodlands, Texas-based company said it revenue has grown at a compound annual rate of 61 percent since 2010.

LGI Homes sold 1,062 homes in 2012, almost 2.5 times higher than 2010. It has sold over 5,000 homes since 2003.

The filing did not reveal how many shares of common stock the company planned to sell or their expected price.

The company intends to list its common stock on the Nasdaq under the symbol "LGIH".

It said Deutsche Bank Securities, JMP Securities, JP Morgan, Barclays, Bank of America Merrill Lynch and Builder Advisor Group were underwriting the IPO.

The amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees. The final size of the IPO could be different.

(Reporting By Varun Aggarwal in Bangalore; Editing by Savio D'Souza)

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Emerging market rout eases as data lifts growth hopes

1 of 2. A man walks through the lobby of the London Stock Exchange August 5, 2011.

Credit: Reuters/Suzanne Plunkett

NEW YORK | Fri Aug 23, 2013 10:19am EDT

NEW YORK (Reuters) - U.S. stocks and the dollar were mostly lower in early New York trade on Friday after a government report showed sales of new single-family homes in America fell sharply in July to their lowest level in nine months, casting a shadow over the country's housing recovery.

The report raised doubts about the timing and extent of cuts to the Federal Reserve's stimulus program.

"This has been a very unique market situation with the Fed stimulus being such an important component to the market rally. This is uncharted waters for us," said Gordon Charlop, managing director at Rosenblatt Securities in New York. "So regardless of what the move is, the fact you are someplace you haven't been before is cause for uncertainty."

The next Fed monetary policy meeting is scheduled for September 17-18.

The Dow Jones industrial average .DJI was down 27.80 points, or 0.19 percent, at 14,935.94. The Standard & Poor's 500 Index .SPX was down 1.78 points, or 0.11 percent, at 1,655.18. The Nasdaq Composite Index .IXIC was up 5.97 points, or 0.16 percent, at 3,644.68.

The dollar surrendered gains against a basket of currencies .DXY on Friday, after earlier climbing to a three-week peak versus the yen, helped by the rise in U.S. bond yields this week on expectations the Fed will reduce its asset-buying program next month.

(Reporting By Nick Olivari; Editing by Nick Zieminski)

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Emerging market sell-off worsens, more pain ahead

An employee poses with the bundles of Indian rupee notes inside a bank in Agartala, the capital of India's northeastern state of Tripura August 22, 2013.

Credit: Reuters/Jayanta Dey

By Sujata Rao

LONDON | Thu Aug 22, 2013 7:33am EDT

LONDON (Reuters) - Heavy selling engulfed emerging markets again on Thursday with more currencies falling prey to fears of higher global borrowing costs and a reduction in cheap cash supplies from the United States.

While the Indian rupee and Turkish lira skidded to new record lows against the dollar and the Indonesian rupiah slumped to fresh four-year lows, currencies such as the Mexican peso and the Korean won that have so far been spared the worst of the recent selloff, are also now feeling the heat.

Market expectations that the U.S. Federal Reserve will start cutting back its $85 billion-a-month money printing program from September were maintained after minutes from the U.S. central bank's July meeting gave little new guidance on timing. That drove a fresh spike in U.S. 10-year yields, the risk-free rate against which all assets, including emerging markets, are benchmarked.

"U.S. yields will go higher - that is obvious - and no one wants to be exposed to assets in emerging markets which are very sensitive to U.S. monetary policy," said Maarten-Jan Bakkum, investment strategist for ING Investment Management's emerging market funds.

As U.S. Treasury yields hit new two-year highs - they stand around 120 basis points higher than early-May levels - more and more investors dumped emerging assets.

Emerging equities fell for the fifth straight session to bring 2013 losses to 13 percent .MSCIEF. Bonds in emerging currencies also sold off with average yields at almost 7 percent on the main GBI-EM index - the highest in more than two years.

Currency weakening accelerated, forcing central banks to step up their efforts to stem it.

Turkey pledged to increase dollar sales to sell $350 million on Thursday after the lira hit a record low for the second day in a row but analysts called for more steps. Turkish stocks shed over 2 percent .XU100 while bond yields rose.

"We expect further interest rate hikes or even an emergency monetary policy meeting," said Ali Cakiroglu, a strategist at HSBC in Istanbul.

Earlier, the Indian rupee fell another 1.5 percent to plumb a new low past 65 per dollar, bringing losses since the start of this week to around 5 percent.

Indonesia too suffered fresh losses and capital outflows, triggering a warning from Fitch that weak policy management could affect credit ratings for it and for India

Brazil will offer $4 billion on the spot market on Thursday, boosting its efforts to curb the real's losses. The currency has tumbled to near five-year lows despite some $30 billion in central bank interventions via the swap markets.

The rand slumped to a new four-year low

MORE EMERGING MARKETS HIT

ING's Bakkum said bearishness had now extended beyond India, South Africa, Turkey, Indonesia and Brazil - markets that were hit first because of their reliance on foreign capital.

"The five that were in focus so far are obvious victims as they need external capital to fund themselves but there are also worries about economic growth," he said.

"Countries such as Thailand and Mexico that had strong capital inflows and credit growth are also looking vulnerable as their growth expectations were based on assumptions of strong capital flows."

Data from Malaysia confirmed the worsening fundamentals of emerging markets, showing an economic slowdown and an evaporating current account surplus. That pushed the ringgit to three-year lows.

The Thai baht too fell to three-year lows, forcing the central bank to reassure markets it would act if needed, while the Korean won fell to two-week lows.

Selling has also hit the Mexican peso which lost 2 percent on Wednesday while Russia's rouble sank to almost a four-year low versus a euro-dollar basket and data showed central bank dollar sales of $3.7 billion in August.

Analysts are reluctant to call the end of the selloff. Of the trillions of dollars that flooded into emerging markets over the past decade, they note that very little has actually exited, indicating scope for more huge outflows.

Data from Lipper, a Thomson Reuters company, shows that in the three months to end-July, global emerging equity funds it tracks saw net outflows of about $8 billion. That equates to just under 2 percent of total assets under management.

Funds dedicated to emerging dollar debt have shed a net $1 billion this year compared to $124 billion in assets, it says.

"In the medium and long term we are positive about emerging markets. Flows into the asset class reflect a structural rather than cyclical change in global asset allocation," said Thanasis Petronikolos, head of emerging debt at Baring Asset Management.

"But in the short term there will be more fluctuations."

(For GRAPHIC on MSCI emerging index performance 2013, see link.reuters.com/weh36s

(Additional reporting by Joel Dimmock in London; editing by Stephen Nisbet)

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U.S. labor market, factory data show economy firming

A job-seeker completes an application at a career fair held by civil rights organization National Urban League as part of its annual conference, in Philadelphia July 25, 2013.

Credit: Reuters/Mark Makela

By Jason Lange

WASHINGTON | Thu Aug 22, 2013 10:55am EDT

WASHINGTON (Reuters) - The number of Americans filing new claims for jobless benefits last week held near a six-year low and U.S. manufacturing activity rose this month, suggesting the economy is starting to find firmer footing.

Initial claims for state unemployment benefits climbed 13,000 to 336,000, just above the level expected by economists in a Reuters poll, Labor Department data showed on Thursday.

Despite the increase, the four-week moving average for claims, which smooths out weekly volatility, fell to its lowest level since November 2007. That backed the widely-held view that U.S. economic growth will accelerate in the second half of the year, and hinted at a stronger pace of hiring in August.

"The trend in the data has been signaling some recent improvement in the labor market," said Daniel Silver, an economist at JPMorgan in New York.

Separately, financial data firm Markit said its preliminary index on factory activity rose in August to 53.9, its best showing since March. A reading above 50 indicates expansion.

"Hopefully the faster growth of new orders seen during August will translate into increasingly strong production gains," said Markit chief economist Chris Williamson.

The U.S. economy has grown at a lackluster pace in recent months, hurt in part by the impact of federal budget cuts.

An index of leading economic indicators published on Thursday by the Conference Board rose 0.6 percent in July, supporting the expectations that growth would accelerate in the remainder of the year.

The generally upbeat data fueled small gains in U.S. stock prices. Yields on U.S. government debt were little changed.

The Federal Reserve is closely monitoring the labor market as it mulls plans to draw down a major economic stimulus program in which it buys long term bonds to keep borrowing costs low.

Fed Chairman Ben Bernanke said last month that the central bank plans to start scaling back on the program this year, and many economists expect it will begin reducing monthly bond purchases in September.

The claims data was collected during the same week the Labor Department surveys employers for its monthly employment report, and the trend hinted that hiring may pick up during August.

At 330,500, the four-week average was about 5 percent lower than it was during the employment report's survey week in July, when employers added a lackluster 162,000 jobs to payrolls.

Still, economists are wary of the claims report's predictive power for hiring. Employers now appear to be laying off workers at roughly pre-recession levels, yet the pace of hiring has appeared to slow since the spring.

"The pace of layoffs may continue to ease, but there is little indication that firms have become more inclined to hire," economists at RBS said in a note to clients.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid rose 29,000 to about 3 million in the week ended Aug 10.

(Additional reporting by Margaret Chadbourn in Washington and by Steven C. Johnson and Richard Leong in New York; Editing by Paul Simao)

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Housing Market: Builder Plots Acceleration

The boss of Bovis Homes has told Sky News the company is to step up its building of new houses as the market recovery gathers pace.

David Ritchie was speaking after the builder posted a 19% increase in first half pre-tax profit to £18.6m.

It said that while market house price increases were estimated at up to 2% over the year to date, its own average sale price had risen to £188,500 on average - a rise of 15%.

Bovis, like its competitors, has credited Government measures such as the Help to Buy shared equity scheme for improved activity in the market, benefiting first-time buyers especially.

Funding for Lending has aided borrowers in that it has brought down mortgage costs.

David Ritchie sees construction accelerating this year and next

The company spoke of an acceleration in business, with trading in the 32 weeks to August 9 realising a 43% increase in private reservations to 1,712 homes.

Mr Ritchie said: "The group has performed strongly during the first half of 2013 and has delivered a 50% increase in housing operating profit.

"We have plan in place this year to increase our production by around 25% year over year and we expect to increase our production again in 2014.

"So we are stepping up and building significantly more homes because of the initiatives the Government have put in place and our strategy being deployed."

Official data and other market surveys have all pointed to a recovery in activity, with the Royal Institution of Chartered Surveyors (RICS) suggesting there were signs of a recovery "round the corner" with every region of the country showing growth.

The speed of the market improvement in recent months has led ministers to dismiss fears that the Government's intervention risks creating a market bubble.

The property website Rightmove's latest report found the revival continued in August, despite the month seeing the first dip in sellers' asking prices during 2013.

It said asking prices edged down by 1.8% month-on-month to £249,199 on average - but the string of price increases seen over the last seven months meant they were still £20,000 higher now than at the start of the year.

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European car market grew nearly 5 percent in July: Germany's VDA

Matthias Wissmann, president of the German carmaker association VDA, poses for the media before he addresses an annual news conference in Berlin December 2, 2011.

Credit: Reuters/Fabrizio Bensch

FRANKFURT | Fri Aug 16, 2013 7:47am EDT

FRANKFURT (Reuters) - Europe's ailing car market grew in annual terms for only the second time this year in July, supporting hopes of a much-needed stabilization for battered producers in the second half of 2013.

Registrations of new cars in Europe rose 4.8 percent compared to the same month a year ago to 1.02 million vehicles, according to data published on Friday by the German auto industry association VDA.

Second quarter corporate results have also surprised by suggesting some mass-market producer are closer to breaking even in Europe than previously thought. But it is all happening at a very low base - sales are around the lowest in 20 years and overall are set to fall for the fourth year running.

"The positive July result ... is a good start for the stabilization we expect in the second half," VDA President Matthias Wissmann said in a statement.

"The emerging economic recovery in western Europe appears to be reflected in the development of car demand," he said.

He saw hope in double-digit gains in austerity-hit Spain, Portugal and Greece, where sales have roughly halved from peaks before the 2008 financial crisis.

An extra working day in Germany, the region's economic engine of growth, helped lift domestic sales slightly in July over the previous year's month, but Frankfurt-based market researcher Dataforce calculates that volumes there still shrank 2.3 percent when adjusted for this calendar effect.

Wolfsburg-based Volkswagen (VOWG_p.DE) reported sales in its home market dropped 4.1 percent, diluting gains in China and the United States to reduce its global growth to the slowest in four months.

"Conditions in some markets were at times extremely challenging," VW sales chief Christian Klingler said. "The economic climate remains difficult."

Overall VW group sales rose 3.2 percent to 757,700 cars, sport-utility vehicles and light vans. Its seven-month European sales, including luxury brand Audi and sports-car maker Porsche, fell 3.1 percent to 2.16 million autos.

VW withstood most of last year's slump in Europe, the destination of 40 percent of its global deliveries, thanks to growth overseas and a wide range of models from small fuel-efficient vehicles like the Up! city car to ultra-luxury saloons including Bentley's Continental.

By contrast, automakers dependent on European markets such as PSA Peugeot Citroen (PEUP.PA) have been suffering for months from the region's economic crisis, seeking to close factories and lay off staff to counter heavy losses.

Registrations in the first seven months of the year fell 5.2 percent to 7.46 million vehicles, but demand is expected to cease dropping materially as sales rates have started to recover and year-on-year comparisons become easier given the second half of 2012 was weak.

A senior Ford (F.N) executive told Reuters earlier this week that a manufacturers' price war would not let up until sales increase significantly.

(Reporting by Christiaan Hetzner, Andreas Cremer and Maria Sheahan; editing by Patrick Graham)

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European car market grew nearly 5 percent in July: Germany's VDA

Matthias Wissmann, president of the German carmaker association VDA, poses for the media before he addresses an annual news conference in Berlin December 2, 2011.

Credit: Reuters/Fabrizio Bensch

FRANKFURT | Fri Aug 16, 2013 7:47am EDT

FRANKFURT (Reuters) - Europe's ailing car market grew in annual terms for only the second time this year in July, supporting hopes of a much-needed stabilization for battered producers in the second half of 2013.

Registrations of new cars in Europe rose 4.8 percent compared to the same month a year ago to 1.02 million vehicles, according to data published on Friday by the German auto industry association VDA.

Second quarter corporate results have also surprised by suggesting some mass-market producer are closer to breaking even in Europe than previously thought. But it is all happening at a very low base - sales are around the lowest in 20 years and overall are set to fall for the fourth year running.

"The positive July result ... is a good start for the stabilization we expect in the second half," VDA President Matthias Wissmann said in a statement.

"The emerging economic recovery in western Europe appears to be reflected in the development of car demand," he said.

He saw hope in double-digit gains in austerity-hit Spain, Portugal and Greece, where sales have roughly halved from peaks before the 2008 financial crisis.

An extra working day in Germany, the region's economic engine of growth, helped lift domestic sales slightly in July over the previous year's month, but Frankfurt-based market researcher Dataforce calculates that volumes there still shrank 2.3 percent when adjusted for this calendar effect.

Wolfsburg-based Volkswagen (VOWG_p.DE) reported sales in its home market dropped 4.1 percent, diluting gains in China and the United States to reduce its global growth to the slowest in four months.

"Conditions in some markets were at times extremely challenging," VW sales chief Christian Klingler said. "The economic climate remains difficult."

Overall VW group sales rose 3.2 percent to 757,700 cars, sport-utility vehicles and light vans. Its seven-month European sales, including luxury brand Audi and sports-car maker Porsche, fell 3.1 percent to 2.16 million autos.

VW withstood most of last year's slump in Europe, the destination of 40 percent of its global deliveries, thanks to growth overseas and a wide range of models from small fuel-efficient vehicles like the Up! city car to ultra-luxury saloons including Bentley's Continental.

By contrast, automakers dependent on European markets such as PSA Peugeot Citroen (PEUP.PA) have been suffering for months from the region's economic crisis, seeking to close factories and lay off staff to counter heavy losses.

Registrations in the first seven months of the year fell 5.2 percent to 7.46 million vehicles, but demand is expected to cease dropping materially as sales rates have started to recover and year-on-year comparisons become easier given the second half of 2012 was weak.

A senior Ford (F.N) executive told Reuters earlier this week that a manufacturers' price war would not let up until sales increase significantly.

(Reporting by Christiaan Hetzner, Andreas Cremer and Maria Sheahan; editing by Patrick Graham)

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Samsung sells 76 million smartphones in second quarter, boosting market share: report

Samsung Electronics Co's latest Galaxy S4 phone is seen during its launch at the Radio City Music Hall in New York March 14, 2013.

Credit: Reuters/Adrees Latif

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Samsung sells 76 million smartphones in second quarter, boosting market share: report

Samsung Electronics Co's latest Galaxy S4 phone is seen during its launch at the Radio City Music Hall in New York March 14, 2013.

Credit: Reuters/Adrees Latif

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Wall Street falls in early trade as market takes breather

Traders work on the floor of the New York Stock Exchange, July 26, 2013.

Credit: Reuters/Brendan McDermid

By Angela Moon

NEW YORK | Fri Jul 26, 2013 11:13am EDT

NEW YORK (Reuters) - Stocks fell on Friday as the market took a breather from a recent rally that has taken the S&P 500 up about 18 percent for the year and as investors digested major earnings.

Major U.S. stock indexes have advanced steadily this year with the S&P 500 hitting an all-time high earlier this week. The broad market index has ended higher 13 times in the past 16 sessions.

For the week, the S&P is down about 0.5 percent, its first down week in five, but the benchmark is up 4.8 percent so far this month, its best month since January. The Nasdaq is up 5.4 percent in July so far, its best monthly gain in a year and half.

"There were two days this week, Tuesday and Wednesday, when we came strikingly close to the 1,700 (on the S&P 500) but didn't quite move up. There is profit taking here and there as we face this resistance," said Randy Frederick, director of derivatives at the Schwab Center for Financial Research in Cincinnati, Ohio.

The Dow Jones industrial average .DJI was down 70.04 points, or 0.45 percent, at 15,472.20. The Standard & Poor's 500 Index .SPX was down 4.62 points, or 0.27 percent, at 1,681.32. The Nasdaq Composite Index .IXIC was up 0.34 points, or 0.01 percent, at 3,579.94.

Among the top decliners, Expedia Inc (EXPE.O) shares plunged 23 percent to $50.20, a day after the online travel agency reported a quarterly profit far short of market estimates, due to higher competition and poor performance in its discount website, Hotwire.com.

Zynga Inc (ZNGA.O) shares plunged 17.4 percent to $2.89 a day after the company announced it will largely abandon its efforts to build an online gaming business in the United States.

Amazon.com Inc (AMZN.O) shares lost 2.1 percent to $297.14 after its forecast disappointed on income and revenue. Amazon faces with a weaker international market, overshadowing improved profit and economic conditions in the United States.

Starbucks Inc (SBUX.O) shares rose 6 percent to $72.34, a day after the world's biggest coffee chain posted a bigger-than-expected jump in quarterly profit.

As of Thursday's close, 47 percent of the S&P 500 companies reported earnings, and about 68 percent of them have topped profit forecasts, above the historical average of 63 percent. About 56 percent have reported better-than-expected revenue, a rate that is below the historical average.

In M&A news, Vivendi (VIV.PA) plans to sell the bulk of its stake in Activision Blizzard Inc (ATVI.O) to the video games maker and its management for $8.2 billion, the French conglomerate's second blockbuster deal in a week.

Activision shares, one of the most traded in early session, were up 14.8 percent to $17.45.

Data showed U.S. consumer sentiment rose in July to the highest level in six years as Americans felt better about the current economic climate, though they expected to see a slower rate of growth in the year ahead. Market reaction was muted.

European shares edged lower on Friday. Germany's DAX .GDAXI market had already unsettled some investors this week with profit warnings from some of its leading companies. .EU

In Asia, Japan's Nikkei share average slid 3 percent and was near a three-week low on Friday, with blue-chip exporters and financials leading declines on the back of a stronger yen and profit-taking. .T

(Reporting by Angela Moon; Editing by Nick Zieminski)

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Wall Street falls in early trade as market takes breather

Traders work on the floor of the New York Stock Exchange, July 26, 2013.

Credit: Reuters/Brendan McDermid

By Angela Moon

NEW YORK | Fri Jul 26, 2013 11:13am EDT

NEW YORK (Reuters) - Stocks fell on Friday as the market took a breather from a recent rally that has taken the S&P 500 up about 18 percent for the year and as investors digested major earnings.

Major U.S. stock indexes have advanced steadily this year with the S&P 500 hitting an all-time high earlier this week. The broad market index has ended higher 13 times in the past 16 sessions.

For the week, the S&P is down about 0.5 percent, its first down week in five, but the benchmark is up 4.8 percent so far this month, its best month since January. The Nasdaq is up 5.4 percent in July so far, its best monthly gain in a year and half.

"There were two days this week, Tuesday and Wednesday, when we came strikingly close to the 1,700 (on the S&P 500) but didn't quite move up. There is profit taking here and there as we face this resistance," said Randy Frederick, director of derivatives at the Schwab Center for Financial Research in Cincinnati, Ohio.

The Dow Jones industrial average .DJI was down 70.04 points, or 0.45 percent, at 15,472.20. The Standard & Poor's 500 Index .SPX was down 4.62 points, or 0.27 percent, at 1,681.32. The Nasdaq Composite Index .IXIC was up 0.34 points, or 0.01 percent, at 3,579.94.

Among the top decliners, Expedia Inc (EXPE.O) shares plunged 23 percent to $50.20, a day after the online travel agency reported a quarterly profit far short of market estimates, due to higher competition and poor performance in its discount website, Hotwire.com.

Zynga Inc (ZNGA.O) shares plunged 17.4 percent to $2.89 a day after the company announced it will largely abandon its efforts to build an online gaming business in the United States.

Amazon.com Inc (AMZN.O) shares lost 2.1 percent to $297.14 after its forecast disappointed on income and revenue. Amazon faces with a weaker international market, overshadowing improved profit and economic conditions in the United States.

Starbucks Inc (SBUX.O) shares rose 6 percent to $72.34, a day after the world's biggest coffee chain posted a bigger-than-expected jump in quarterly profit.

As of Thursday's close, 47 percent of the S&P 500 companies reported earnings, and about 68 percent of them have topped profit forecasts, above the historical average of 63 percent. About 56 percent have reported better-than-expected revenue, a rate that is below the historical average.

In M&A news, Vivendi (VIV.PA) plans to sell the bulk of its stake in Activision Blizzard Inc (ATVI.O) to the video games maker and its management for $8.2 billion, the French conglomerate's second blockbuster deal in a week.

Activision shares, one of the most traded in early session, were up 14.8 percent to $17.45.

Data showed U.S. consumer sentiment rose in July to the highest level in six years as Americans felt better about the current economic climate, though they expected to see a slower rate of growth in the year ahead. Market reaction was muted.

European shares edged lower on Friday. Germany's DAX .GDAXI market had already unsettled some investors this week with profit warnings from some of its leading companies. .EU

In Asia, Japan's Nikkei share average slid 3 percent and was near a three-week low on Friday, with blue-chip exporters and financials leading declines on the back of a stronger yen and profit-taking. .T

(Reporting by Angela Moon; Editing by Nick Zieminski)

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Samsung sells 76 million smartphones in second quarter, boosting market share: report

SEOUL (Reuters) - Samsung Electronics Co Ltd sold 76 million smartphones in the second quarter, expanding its market share to 33.1 percent, Strategy Analytics said on Friday.

Overall, the global smartphone market grew 47 percent to a record 229.6 million, the research firm said.

Second-ranked Apple Inc saw its market share shrink to 13.6 percent after selling 31.2 million iPhones, as smaller rivals such as LG Electronics Inc, ZTE Corp and Huawei Technologies Co Ltd seized larger slices.

(Reporting by Miyoung Kim; Editing by Stephen Coates)

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Wall St. Week Ahead: As Fed takes a backseat, earnings rule market

Wall Street is written on a building in New York's financial district, March 4, 2013.

Credit: Reuters/Brendan McDermid

By Alison Griswold

NEW YORK | Fri Jul 19, 2013 5:56pm EDT

NEW YORK (Reuters) - Wall Street is experiencing its best month since January and looks poised to extend the rally with a deluge of earnings next week, though significant gains may be harder to come by with major indexes at record highs.

Eight Dow components and Apple (AAPL.O) are among the companies that will report in one of the busiest weeks of the earnings season. Some 157 companies in the S&P 500 index will release results.

Second-quarter earnings have been above forecasts so far, but analysts' estimates have dropped precipitously since the start of the year. Earnings for S&P 500 companies are seen rising 2.9 percent, according to Thomson Reuters data, down from an 8.4 percent growth expected at the start of the year. Revenue is seen growing 1.1 percent.

Still, stronger-than-expected reports spurred gains in IBM (IBM.N), General Electric (GE.N) and others. In addition, Wall Street banks Citigroup, Goldman Sachs and Morgan Stanley reported strong earnings.

For this week, the Dow rose 0.5 percent, the S&P added 0.7 percent and the Nasdaq fell 0.3 percent. The benchmark S&P is up 18.6 percent for the year.

On the other side of the ledger, Microsoft (MSFT.O) was a big disappointment, and its shares fell 12 percent on Friday. Both Microsoft and Google (GOOG.O) fell short of Wall Street expectations, causing their shares to slump.

Of the 104 companies in the S&P 500 that have reported through Friday, 65.4 percent had earnings above analyst expectations, while 51 percent topped revenue estimates.

EYES ON APPLE

Apple, the second-largest U.S. company by market capitalization, will be watched to see if it can reverse the trend of weaker-than-expected tech sector earnings. The company, which is due to report on Tuesday after the market's close, is expected to show a drop of more than 21 percent in quarterly profit and revenue growth of 0.2 percent.

The Federal Reserve has been the primary driver of the market for a long time. But that should change, at least for a time, after investors were reassured that the Fed would be flexible in the timing of its withdrawal of stimulus measures and would keep interest rates ultra-low for an extended period.

The Fed's stimulus played a major part in the S&P's advance so far this year. Investors now speculate earnings will be the next catalyst to push stocks higher.

"So far it's been about the Fed supporting the movement upwards, but at a certain point there's a handoff, and earnings will have to take over," said Kristina Hooper, head of investment and client strategies at Allianz Global Investors in New York. "Earnings are going to be so critical to the future of the stock market recovery."

Analysts have generally been bullish on 2013's second half, though they have been slowly lowering estimates for the third and fourth quarters to reflect concerns about the economy's growth.

Per-share earnings growth is expected to be 7.8 percent in the third quarter and 12.4 percent in the fourth quarter. That compares with a July 1 estimate of 8.5 percent growth and 13 percent growth, respectively, according to Thomson Reuters data.

NEED FOR REVENUE GROWTH

"Revenue growth is especially important," said David Joy, chief market strategist at Ameriprise Financial in Boston. "If revenues aren't increasing, it's going to be awfully tough for the bottom line to increase."

Joy, who helps oversee about $708 billion in assets, added that it was encouraging to see revenue coming in slightly ahead of expectations.

"My sense is that the markets can hang in there next week," he said. "The trend is to the upside."

General Electric Chief Executive Jeff Immelt said he was bullish on the outlook for the rest of the year, a sentiment echoed by other executives.

But Nick Heymann, an analyst at William Blair & Co, which trades GE shares, said for GE to achieve its goal of boosting 2013 margins by 0.7 percent would "require Herculean improvement in the second half.

With 21 percent of the S&P components having reported, roughly two-thirds have beaten profit expectations, slightly above the historical average. About half of the companies have topped revenue forecasts, a rate better than the average over the past four quarters.

Next week's earnings roster includes Dow components AT&T (T.N), McDonald's (MCD.N) and Boeing Co (BA.N). Ford Motor Co (F.N), Visa (V.N) and United Parcel Service (UPS.N) are also due. UPS, which is viewed as a proxy for business activity, recently cut its outlook, citing a weak U.S. economy and overcapacity in the global air freight market.

Economic indicators next week include sales of new and existing homes. Sentiment among builders remains bullish, though housing starts and permits for future homes hit a 10-month low in June.

"Obviously a big surprise there to the downside will cause a lot of caution," said Andrew Yorks, chief investment officer at Four Wood Capital Partners in New York. "The housing sector's been a core part of what the Fed is focusing on."

June existing-home sales, which are due Monday, are seen rising 0.6 percent compared with a 4.2 percent jump in the previous month. New-home sales for June are also seen rising, according to Thomson Reuters estimates.

(Wall St Week Ahead runs every Friday. Comments or questions on this one can be sent to alison.griswold(at)thomsonreuters.com)

(Reporting by Alison Griswold; Editing by Kenneth Barry)

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