5 Things to Watch on Wall Street This Week

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KFC in Beijing China 23 Sep 2006
Alamy
You can never know in advance all the news that will move the market in a given week, but some things you can see coming. From the release of a new video game console to an earnings report out of the world's largest retailer, here are some of the items that will help shape the week that lies ahead on Wall Street.

Monday -- Host in the Machine: Most Internet users take web-hosting for granted, but leading websites and apps wouldn't be available if it wasn't for the growing fleet of servers manned by companies specializing in getting websites up and running.

Rackspace (RAX) is a market darling among web hosts, and on Monday it will serve up its latest financials. This has become a competitive market as providers aim to host websites and cloud computing solutions. The end result is that analysts see Rackspace growing its revenue by a hearty 15 percent, but they also see profitability declining during the quarter.

Tuesday -- KFC in China: Yum! Brands (YUM) is the parent company behind the fast food team of Pizza Hut, Taco Bell, and KFC. A surprisingly large portion of Yum! Brands' business in recent years has come from expanding its chicken chain in China.

But the market has been challenging lately. Same-store sales for Chinese KFC locations plunged 14 percent in its latest quarter. As a result of its poor performance in the world's most populous nation, Yum! Brands is temporarily offering monthly same-store sales updates. It will offer an update on how October went on Tuesday after the market close.

Wednesday -- Panic at the Cisco: It may seem like a long time ago, but there was a brief moment in time -- just before the dot-com bubble popped -- that Cisco (CSCO) commanded the largest market capitalization in the country. The Internet was all the rage with investors, and Cisco was the leading provider of routers, switches, and other networking gear that kept the whole web connected.

The past few years have been volatile for Cisco, with the tech bellwether's low point being when it had to concede failure in the consumer market by getting rid of its Flip camcorder division two years ago. Despite layoffs earlier this year, Cisco is starting to bounce back these days. When it reports on Wednesday, analysts see revenue and earnings climbing 4 percent and 6 percent, respectively. That's certainly not the kind of growth that would have one reaching for an old school Flip cam to record, but at least it's Cisco moving in the right direction.

Thursday -- Welcome to Walmart: The world's largest retailer is Walmart (WMT), and it reports on Thursday. This may be one of the better early reads that investors get of the upcoming holiday shopping season: Despite the controversies and disdain that dog the top dog in retail, Walmart is a pretty good gauge of the retail environment among discounters.

If Walmart isn't your bag, other retailers sharing the earnings stage with the company that Sam Walton built include Kohl's (KSS) and Nordstrom (JWN).

Friday -- Sony Skies Ahead: It's been seven years since Sony (SNE) began selling the PS3, and on Friday the PS4 will hit the market. Sony's hoping that its new console will woo diehard gamers. The $400 price point is steep, but it's actually $100 cheaper than the Xbox One that hits stores a week later.

Sony is going with a brand new chip architecture to make its new system more powerful. The downside to that is that older games won't be compatible with the new machine, but Sony has promised an online solution that will allow owners to keep playing older-generation PlayStation games.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems and Rackspace Hosting. Try any of our newsletter services free for 30 days.

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