DAVE HARRIS: Welcome to Dave On Stocks podcast #53. This is for Monday, April 16^th 2007. I'm Dave Harris. I'm a long term investor with a perspective on the market with individual stock advice.

In the week ahead there's get a bunch of economic data for the market to absorb. Monday we'll see the how consumer spending was in March when the Commerce Department reports on retail sales. I'll go over the recent same store sales for last month in a bit. Business inventories also come out Monday. Last week we learned the PPI rose 1% on food and gas prices. But core wholesale inflation in March was flat, that was below expectations of a .2% rise. So in my view, the economy is under less inflation pressure than Wall Street thought and it'ss less likely the Fed will raise rates. On Tuesday, the measure of consumer inflation, the CPI, will be released. Wall Street expects the index to rise by .6% from a .4% last month. A new reading on the struggling housing industry comes out that day when the Commerce Department releases last month's housing starts and building permits. Then on Thursday, the report on weekly initial jobless claims comes out from the Labor Department.

Conglomerate General Electric (GE) said first quarter earnings rose 2% thanks to a strong performance in commercial finance, infrastructure and improvements at NBC Universal. The earnings of .44 cents per share met Wall Street expectations. Revenue rose 6%. Jeff Immelt, the chairman and chief exec, called the quarter solid with double digit earnings per share growth. I have a buy rating on the stock. Full year guidance was issued between $2.18-$2.23 per share. I think the stock is headed to $40. GE closed Friday up by .20 cents to $35.38 per share.

McDonald's (MCD) had a 6.2% same store sales rise in the states last month. I'm very impressed with the growth in Europe. Same store sales were up over 11% there. McDonald's also said worldwide same store sales climbed an impressive 8.2%. I like the long term growth here and recommend the stock.

Overall, retailers reported that same store sales in March came in above expectations. However some were cautious about future performance. Wal-Mart had a 4% rise in March, but warned that April would be a challenge. Federated (FD) issued a lower quarterly forecast. Some bright spots were: Costco (CSCO), they had a 6% same store sales rise. JC Penny (JCP) said sales rose 10.6%. The Gap (GPS) rose 6%, well above estimates. I think the consumer is looking pretty strong here.

On February 2^nd 2007 (podcast #36), I recommended you buy railroad company Burlington Northern Santa Fe (BNI) when it was at $81.69 per share. On Monday April 9^th 2007, the stock soared after Warren Buffett's Berkshire Hathaway said it purchased nearly an 11% stake in BNI. I said BNI was headed to $90 back in February in my podcast. Well the stock went above that after the Warren Buffett news. BNI closed at $90.69 per share on Friday. When Warren Buffett invests, that means it's a solid company at a great value.

Residential builder D.R. Horton (DHI) reported a 37% decline in sales for the second quarter. New home orders are looking pretty weak here. That stock is a sell. I also would avoid K.B. Home (KBH) and Lennar (LEN). Housing has not bottomed. I recommend you sell all homebuilders.

The PPI data may ease concerns brought on earlier in the week from the Fed minutes. Those minutes from the Federal Reserve's meeting last month indicate inflation is the top concern, and that future interest rate hikes may be needed. That's what they've been saying for a long time now, in one way or another. No big surprise there in my view. Still, I think the slow but steady economic growth is intact, and a rate cut is more likely in response to the weak building/housing environment. That would increase consumer spending. For now, the economy is not crumbling apart.

The index on consumer sentiment for April from the University of Michigan was a bit lower than expected at 85.3 from the March reading of 88.4. Inflation worries were the culprit there. On a more positive note, the Commerce department said the U.S. trade gap narrowed unexpectedly to $58.4 billion in February, and that looks good for the economy.

A busy earnings week is ahead. Drug manufacturer Eli Lilly (LLY) and Citigroup (C) have report Monday. Healthcare company Johnson and Johnson (JNJ) and Wells Fargo (WFC) are Tuesday. Abbott labs (ABT) the pharmaceutical and technology company Motorola (MOT) report Wednesday. American Express (AXP) and Google (GOOG) have earnings Thursday. On Friday, it's farm and construction machine maker Caterpillar (CAT) and printer maker Xerox (XRX).

On Friday, the DOW closed up 59.17 to 12,612.13. The NASDAQ rose by 11.62 to 2,491.94. The S&P 500 index advanced 5.05 points to 1,452.85.

That's all for this podcast of Dave On Stocks. I'm Dave Harris. Write me with any comments or questions about the show at the "contact us" link on this page. My website is www.daveonstocks.com. This is Dave On Stocks.