Greenspan and budget dominate US

WALL STREET will have a full plate this week with Federal Reserve chairman Alan Greenspan's continued testimony, the unveiling of the White House's largest Federal budget request in years and the release of key economic data.

All ears will be attuned to Greenspan, who speaks before the Senate on Tuesday. The hearing will give him a chance to explain why the Fed did not cut interest rates at a policy meeting last week.

He previously told Congress he could see signs of a recovery but that he worried about the durability and strength of the rebound.

The White House budget, meanwhile, may add uncertainty to the Fed's outlook because it is expected to contain a sharp rise in requested outlays to cover war related activities and to boost economic growth. How Congress initially responds to the White House request will set the tone for a debate sure to rage in coming months.

Factory orders for December are expected to show a 1.1% rise against a fall of 3.3% a month before, when the data is released on Tuesday.

On Wednesday, fourth-quarter data should show productivity continued to grow at a healthy 1.1% despite the economic slowdown, although unit labour costs are expected to rise 2.3%, a little faster than the Fed might like.

Friday's data is likely to show that December's wholesale inventories fell 0.5% from November, with wholesale sales rising 0.2%.

Data supplied by Thomson Global Markets