Rate-cut present from Fed on cards

WALL Street is in party mood and the Federal Reserve is expected to add a little spike to the punchbowl when policymakers meet for a final time in this year of unprecedented monetary easing.

Tentative signs of the US economy stabilising have been offset by a run of devastating employment data, and Fed chairman Alan Greenspan is expected to announce a quarter-point interest rate cut in what many economists believe will be the last move of one of the most aggressive 12-month easing cycles in US history.

But Friday's news that unemployment surged in November did not kill the prevailing belief on Wall Street that the recession's bottom is near. 'The optimistic bias is strong,' said Prudential Securities Marketwatch analyst Bryan Piskorowksi.

Earnings from retail giant Costco, the wholesale warehouse king, and internet software leader Oracle will win the attention of investors.

Oracle, on Thursday, is expected to report earnings of 10 cents a share, down from 11 cents a year earlier, but the more interesting news will be whether chief executive Larry Ellison, sees the same elements of recovery that Cisco and Intel recently reported. Costco's earnings, also on Thursday, are expected to be 28 cents a share, flat with the year-earlier period.

In the economy at large, retail sales are expected to show a 3% fall for November, evidence of a weak start to the holiday selling season, after a 7.1% rise in October - due to a recovery from the effect of September's terror attacks.

The Consumer Price Index, on Friday, is seen flat, with a 0.2% gain in the core rate.

Data supplied by Thomson Global Markets.