McNaughton Apparel Group Inc. said on Monday it expects second-quarter earnings to beat Wall Street estimates because sales of the company's moderately-priced women's and juniors' clothing have not been hurt by rising interest rates. Shares of McNaughton were up 31/32 at 10-1/2 at midday on the Nasdaq stock market, near their 52-week high of 11-5/8.The clothing designer and marketer, founded in 1981, said it sees earnings per share of $1.20 to $1.30 for the second quarter, well above analysts' expectations of 93 cents as compiled by McNaughton and First Call/Thomson Financial. McNaughton reported diluted earnings of 41 cents per share for the second quarter of fiscal 1999.The company said it expects to report net sales of $155 million to $160 million for the quarter, up from $124 million a year earlier.McNaughton's sells much of its women's career and casual clothing at prices between $19.99 and $29.99 at department stores including J.C. Penney Co Inc. (NYSE:JCP), Sears, Roebuck and Co. (NYSE:S) and Federated Department Stores Inc. (NYSE:FD), according to Boneparth.