Bearish Mood Expected to Prevail on Wall St.

As if Intel Corp.’s profit forecast didn’t cast enough of a pall on the long weekend, investors returning after Labor Day will be wary of a market offering as much pitfall as promise.

Continued strength in oil prices, inconsistent economic news and worries about the outlook for corporate profits will make for a bearish mood on Wall Street, although volume should pick up after a period of thin, choppy trading.

U.S. financial markets will be closed today for the Labor Day holiday.

Hurricane Frances, which hit Florida hard over the weekend, clouded the horizon, albeit bearing a silver lining for some.

Insurance companies could face losses, but home improvement retailers such as Home Depot Inc. and Lowe’s Cos. could gain because of a surge in repair work.

Earnings news slows to a trickle this week, but corporate conferences will draw attention as investors look for signs of additional weakness in profits after Intel’s dismal mid-quarter business update last week.

“September is the worst month for equity market performance,� said Gordon Fowler, chief investment officer at Glenmede Trust Co. in Philadelphia. “It is generally a month when managements guide down expectations.�

Volume was low on the New York Stock Exchange on Friday. Just 924 million shares changed hands, below the NYSE’s daily average last year of 1.4 billion.

The blue-chip Dow Jones industrial average closed slightly lower at 10,260.20. The jobs report, which nearly matched analysts’ expectations, helped stem losses on the index. For the week, the Dow gained 0.64% and the broader Standard & Poor’s 500 index rose 0.54%, but the tech-heavy Nasdaq composite index slid 0.95%.

September is a “confession� period for companies, and with a string of technology conferences this week, investors will be keeping their ears open for news.

Intel’s scaling back of its revenue and profit-margin forecast, blamed on weakened chip demand, has heightened concerns of market watchers.

Oil will also be in focus, analysts said, although prices have fallen from peak levels. If supply concerns -- arising from pipeline sabotage in Iraq and worries over production at Russian oil company Yukos -- intensify, there could be another run-up in prices.

“Oil prices are going to be a continuing source of concern, and we have to watch out for what is happening in the Middle East,� Fowler said. “The less terrorist activity we see, the more downward pressure we will see on oil prices.�

U.S. October crude futures ended trading in New York at $43.99 a barrel Friday, up from $43.17 a week before.

Depending on the damage caused by Hurricane Frances, earnings of insurance companies, such as Allstate Corp., the No. 2 U.S. home and auto insurer, and St. Paul Travelers Cos. could be hurt in the short term.

“The market has been focusing on insurance stocks all week,� said Bryan Piskorowski, market analyst at Wachovia Securities in Richmond, Va. “There will be focus on restaurant stocks and retailers that blamed August same-store sales on [Hurricane] Charley. Home Depots and Lowes of the world will also be in focus given the boarding up and repair thereafter.�

Federal Reserve Chairman Alan Greenspan could also be in the spotlight when he testifies before the House Budget Committee on Wednesday, especially because of Friday’s jobs report.

The Labor Department said employers added 144,000 workers to their payrolls in August and revised upward hiring numbers for the previous two months, increasing expectations that the Fed would continue to increase rates.