Wall Street is hoping its traditional year-end "Santa rally (search)" will pick up steam in the week ahead.

But some investors worry that Federal Reserve (search) Chairman Alan Greenspan (search) just might play the Grinch on Tuesday with some tough talk to go with an expected quarter-point increase in interest rates.

For December so far, the blue-chip Dow Jones industrial average (search) is up 1.1 percent, while the tech-laced Nasdaq Composite Index (search) is up 1.5 percent, and the broad Standard & Poor's 500 index (search) is up 1.2 percent.

"Investors remain very upbeat about the prospect of a year-end rally carrying into 2005," said Michael Sheldon, chief market strategist at New York brokerage Spencer Clarke.

"Probably the biggest thing next week is the Fed meeting," he added.

Wall Street would, of course, welcome "any comments they make that indicate the Fed may either slow down the pace of rate hikes, which I think is unlikely," he said.

On the other hand, stock investors hope that Greenspan & Co., otherwise known as the FOMC, will not "use language indicating they'll become more aggressive in raising interest rates, which I think is also unlikely."

In truth, markets will have a lot more than the Federal Open Market Committee's (search) statement to digest. A steady diet of economic data will include retail sales on Monday, the international trade deficit and industrial production on Tuesday, U.S. fuel inventories on Wednesday, housing starts and the U.S. current account deficit on Thursday, and the Consumer Price Index on Friday.

The overall CPI for November is expected to gain 0.2 percent, while the core CPI, excluding volatile food and energy prices, is also forecast to rise 0.2 percent, according to economists polled by Reuters.

What's more, earnings are expected from many high-profile companies, including two big investment banks, Goldman Sachs Group Inc.(GS) and Lehman Brothers Holdings Inc. (LEH). Results also are due from athletic footwear titan Nike Inc. (NKE); retailer Bed Bath & Beyond Inc (BBBY); business software maker Oracle Corp. (ORCL); Adobe Systems Inc. (ADBE), known for PhotoShop and document-sharing software, and FedEx Corp. (FDX), the world's largest express air shipper.

Just to add to the mix, next Friday, Dec. 17, is "triple witching" day, something that happens only four times a year, when contracts for stock index futures, stock index options, and stock options all expire on the same day.

This event is sometimes referred to as "freaky Friday" and on days like this, markets can be volatile in the final hour of trading.

Another factor probably will influence the stock market in the near term, in Sheldon's opinion: "On a short-term basis, the market is over-bought after the very strong advance following the U.S. election" on Nov. 2.

For the week, stocks dipped, with the Dow down 0.46 percent, while the Nasdaq fell 0.93 percent, and the S&P 500 slipped 0.27 percent.

The price of crude oil, which has caused Wall Street weeks of sleepless nights, fell sharply on Friday. On the New York Mercantile Exchange, crude oil for January delivery dropped $1.82 to settle at $40.71 a barrel — down almost 27 percent from the record $55.67 hit in late October.

Earlier in the day, OPEC ministers agreed to cut production by 1 million barrels per day, starting Jan. 1.

If the S&P 500 can hold above its recent low of 1,167 over the next few days, Sheldon said investors will become more confident because stocks will have been able to show resilience.

Tuesday's Fed meeting, though, is undoubtedly the week's main event. Some investors are hoping for even the slightest of hints that the Fed's "measured pace" of interest-rate increases could be slowed in 2005. Others think that is unrealistic.

Wall Street expects the Fed will stick with its measured pace of rate increases and lift its benchmark fed funds rate a quarter percentage point to 2.25 percent on Tuesday.

But investors will pounce on anything the Fed says about inflation.

The Wall Street Journal has reported that some officials believe U.S. inflation risks are on the rise. So analysts will watch carefully for any change in the language of the Fed statement.

"The most likely scenario following the Fed meeting is that the language will be similar to prior meetings," Sheldon said.

If the Fed says nothing crucial about inflation, markets will have another chance to read between the lines of Fed-speak Thursday when the central bank releases minutes of its Nov. 10 meeting.

Ned Riley, chief investment strategist at State Street Global Advisors in Boston, said, "I believe the Fed should at least signal that there could be an end in sight to this raising of interest rates, which I doubt they'll admit.

"There is not a growth bias to this economy at the moment ... so I would like to see the Fed bring out, at least in the commentary, a more flexible policy concerning 2005 ...

"I think what you'll have is a better market next week, only because it's hope springing eternal that the Fed will indicate that it needs to ease off a bit."