First, the good news for stocks: The Federal Reserve this week is likely to say it's done with its rate-cutting spree, hinting at an economic recovery to come, and nudging the equity market higher. 

Now the bad news: Mixed signals on the economy, weak corporate earnings and lukewarm profit forecasts will cast a pall on Wall Street's mood, pulling stocks in the opposite direction. 

The result: A virtually unchanged market, experts say. 

The Fed's policy-setting committee has its first meeting of the year this week. Federal Reserve Chairman Alan Greenspan has hinted that the central bank will put an end, for now at least, to the aggressive rate cutting that drove short-term interest rates to 40-year lows. 

``That might be good for stocks, in that if the Fed doesn't have to cut, it sends a signal that it thinks the economy has started to pick up,'' said Peter Coolidge, senior equity trader at Brean, Murray & Co. 

Nevertheless, Wall Street pros expect the market to seesaw in the days ahead as investors grapple with the question of whether stocks are too pricey -- given the market's strong run late last year, tepid earnings forecasts and inconsistent economic data. 

While more than half of the companies in the S&P 500 have issued their corporate report cards, a torrent of results is on its way. Tech giant Texas Instruments and two blue-chip names -- American Express Co. and The Walt Disney Co. -- are scheduled to report earnings. 

Wall Street also will have a slew of fresh data on the U.S. economy to scan through, including reports on fourth-quarter gross domestic product (GDP), durable goods, consumer confidence, personal income and spending data, and monthly unemployment statistics. 

``Investors are torn between looking back to what happened last quarter during the recession and projecting forward to where we see a recovery in the economy,'' said John Davidson, president and chief executive officer at PartnerRe Asset Management, which oversees $4 billion. 

Davidson added that the market's fourth-quarter strength leaves little room to rally. 

WALL STREET SEES STEADY FED 

On Thursday, Fed Chairman Alan Greenspan raised expectations the central bank will leave interest rates alone next week after he said the U.S. economy is emerging from recession. He questioned the need for a fiscal stimulus package. 

Stocks rose on the Fed chief's comments, which were noticeably more upbeat than remarks he made earlier this month. He conceded that he could have made a better choice of words in his previous remarks. 

The Fed is expected to leave its benchmark federal funds rate unchanged at 1.75 percent at the end of its two-day meeting Wednesday, according to 22 out of 24 primary dealers of U.S. government securities polled by Reuters. 

Most dealers expect the Fed to hold rates steady until at least the middle of this year. Worth noting: A hefty majority see the Fed raising rates by the end of 2002. The Fed cut rates 11 times last year to help salvage the crumbling U.S. economy. 

Despite growing expectations of an economic rebound, however, many fund managers see little hope for a big surge in the stock market until true signs of a turnaround emerge. 

``It's great to say it, but let's see it,'' said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank Private Banking, which oversees about $9 billion, in reference to Greenspan's comments this week. ``With the market trading at 23 times earnings, you really need that second confirmation that Corporate America is fixed.'' 

The S&P 500 jumped 9 percent in the final quarter as investors placed bets on an economic rebound, following the stock market's plunge to three-year lows in the wake of the Sept. 11 attacks on New York City's World Trade Center and the Pentagon. 

GRIM EARNINGS PARADE RESUMES 

Wall Street has just wrapped up the busiest two-week stretch of one of the worst earnings periods in 10 years. The S&P 500, the Nasdaq Composite index and the Dow all ended a shortened trading week up around half a percent. 

``There's no way you can look at the fourth quarter and say there were many good hot spots, in terms of earnings,'' said Bernard Horn, president and portfolio manager at Polaris Capital Management. 

Fourth-quarter earnings are expected to show a drop of 21.5 percent, running neck-and-neck with the third quarter's drop of 21.6 percent -- the worst in a decade, according to earnings tracking firm Thomson Financial/First Call. 

One bright spot: Out of the 265 S&P 500 companies to report so far, 59 percent exceeded Wall Street's expectations; 27 percent met them, and 14 percent missed forecasts. 

Wall Street stalwarts like Coca Cola Co. and Honeywell are on tap to report earnings. Also on the earnings grid: oil heavyweight ChevronTexaco, office equipment company Pitney Bowes , and consumer products giants Gillette and Procter & Gamble; tech name Veritas Software, and a fistful of telecommunications firms, such as AT&T; AT&T Wireless; Verizon Communications and Qwest Communications. 

A DATA-RAMA 

The economic data calendar is crowded this week. 

On Tuesday, a double dose of data: 

-- The Conference Board's consumer confidence report will be closely watched as an indicator of whether Americans will keep spending. The main index is expected to rise to 96.9 in January from 93.7 in December. 

-- A clue on whether the nation's recession-strapped manufacturing sector is beginning to recover may come from the report on new orders for durable goods, which are expected to show a gain of 1.3 percent in December, compared with a drop of 4.8 percent in November. 

On Wednesday, the government will give its advance estimate of fourth-quarter U.S. GDP. Economists in a Reuters survey estimated fourth-quarter GDP dropped 1.0 percent, marking a second straight quarter of contraction in U.S. growth. Two consecutive quarters of decline are widely seen as the official stamp of a recession. U.S. GDP dropped 1.3 percent in the third quarter of 2001. 

On Thursday, investors will look at personal income and spending data for hints on whether American consumers -- who fuel about two-thirds of U.S. economic activity with their spending -- are keeping up their pace. Personal income is expected to have risen 0.3 percent in December, while spending fell 0.1 percent, according to a Reuters poll. 

On Friday, Wall Street will scrutinize the crucial jobs data. U.S. payrolls are expected to have shed 27,000 jobs in January, according to economists polled by Reuters, following a drop of 124,000 in December. Economists estimated the unemployment rate rose to 5.9 percent in January from 5.8 percent in December.