Lowe's Home Improvement (LOW) is expected to report today that its second-quarter earnings fell 16 percent from a year ago, and analysts said its outlook could weaken because of rising costs and no relief from the housing market.

The chain, based in Mooresville, just outside of Charlotte, is the second-largest home improvement chain the world and has 1,575 stores in the United States and Canada.

Despite a bump from store openings, the weak housing market has been a drag on same-store sales, a measure of sales at stores open at least one year. Lowe's has been gaining market share and stressing customer service to differentiate itself from rival Home Depot (HD), which reports second-quarter earnings Tuesday.

Lowe's reports before the market opens.

EXPECT BAD NEWS FROM RETAILERS

Several clothing retailers report earnings this week. Citigroup analyst Kimberly Greenberger says mall traffic has been falling and most companies that she tracks are revising earnings expectations down. Analysts predict higher profit for Ross Stores (ROST), Gymboree (GYMB), Limited Brands (LTD), Children's Place (PLCE) and Aeropostale (ARO), but others are expected to report lower earnings.

Saks (SKS), Target (TGT) and BJ's Wholesale Club (BJS) are among a host of retailers reporting second quarter earnings this week.

ECONOMIC CALENDAR

TUESDAY: The Labor Department releases the Producer Price Index at 8:30 a.m., and the Commerce Department reports on housing starts for July, also at 8:30 a.m.

THURSDAY: The Labor Department releases its weekly jobless claims report 8:30 a.m. The Conference Board releases its index of leading economic indicators for July.

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