U.S. stocks may stall at the start of next week as investors wait for the outcome of the Federal Reserve's policy meeting.

No change in interest rates is expected when the Federal Open Market Committee convenes Tuesday for its last meeting of the year. But investors will comb through the FOMC's statement for some insight into how the Fed sees the economy.

"Traders are going to be positioning for the Fed meeting," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. "Players are becoming a little bit more concerned here."

The caution may linger until Wall Street sees Friday's data on the U.S. Consumer Price Index for November. Investors will be anxious to learn whether inflation was mild enough to keep Americans spending — and driving U.S. economic growth.

Investors are still digesting a month's worth of confusing economic data. Although stocks reversed two weeks of poor performance and finished this week with gains, they are still on shaky ground, analysts said.

For the week, the Dow Jones industrial average rose 0.93 percent and the Standard & Poor's 500 index gained 0.94 percent, while the Nasdaq Composite Index climbed 1 percent.

On Tuesday, the U.S. central bank is likely to keep the fed funds rate at 5.25 percent. The FOMC's statement is due at 2:15 p.m.

"With the absence of the Fed really doing anything, I think there will be more of a view toward what is happening with the economy and how that might impact the equity and fixed-income markets," said Neil Wolfson, chief investment officer at Wilmington Trust in New York.

Aside from a stronger-than-expected jobs report Friday, much of the economic data from the past few weeks has fallen short of expectations.

In recent speeches, Federal Reserve Chairman Ben Bernanke and other central bankers suggested inflation was still their biggest worry.

"The question is: 'At what point does the economy soften enough and do companies start running out of steam?' Inflation is certainly a key statistic to look at," Wolfson said. "The Fed has been very clear in stating that they believe inflation should be below 2.0 percent" on a year-over-year basis.

INFLATION AND OPEC WATCH

Before Friday's opening bell, the Labor Department will release the November CPI data. Economists polled by Reuters forecast a gain of 0.2 percent in the overall CPI, following October's drop of 0.5 percent.

Core CPI, excluding volatile food and energy prices, also is expected to rise 0.2 percent in November, compared with October's gain of 0.1 percent, the Reuters poll showed.

Oil prices will be on Wall Street's radar next week, with the Organization of Petroleum Exporting Countries expected to cut production when it meets Thursday in Nigeria.

U.S. crude oil for January delivery settled Friday at $62.03 a barrel, down 46 cents, and off a session high at $63.65, on the New York Mercantile Exchange. For the week, NYMEX January crude was down $1.40, or off 2.2 percent.

Since hitting a record of $78.40 a barrel in mid-July, NYMEX oil futures prices have dropped about 21 percent.

HOLIDAY SPENDING

In the coming week, an Investor's Business Daily index on consumer confidence for December and a report on the U.S. international trade deficit for October will be released Tuesday. November retail sales data will come out Wednesday.

The IBD/TIPP index of economic optimism for December will get attention from investors looking to judge the strength of the holiday shopping season.

"It's interesting to see how consumer confidence will hold up," Wolfson said. "The retailers wait for 11 months for December to happen and now we're here, so it can certainly make or break their year. It's looking right now to be a bit soft, but certainly not anything that is going to be devastating to the retailers."

The international trade deficit is forecast at $63.0 billion in October, down from September's $64.3 billion.

November retail sales are seen up 0.2 percent, compared with October's 0.4 percent drop, the Reuters poll showed.

BANKABLE EARNINGS

A sprinkling of earnings reports will keep stock investors on their toes next week. Quarterly results from retailers Best Buy Co. Inc. and Dollar General Corp. on Tuesday, plus Costco Wholesale Corp. earnings on Thursday, will help investors assess the strength of consumer spending.

On the tech front, graphic software maker Adobe Systems Inc. is due to report results Thursday.

Among the most anticipated reports will be fourth-quarter earnings from investment banks Goldman Sachs Group Inc., Bear Stearns Cos. Inc. and Lehman Brothers Holdings Inc. Goldman Sachs' scorecard is set for release Tuesday. Bear Stearns and Lehman Brothers will report results Thursday.

Record mergers and acquisition activity, rising demand for stock and debt financing and persistent trading strength with the three major U.S. stock indexes near recent highs have set the big Wall Street banks up to report a banner quarter.

On Friday, the blue-chip Dow average closed at 12,307.49, not far below its lifetime intraday high of 12,361.00, set on Nov. 22. For the year to date, the Dow is up 14.84 percent.

The broad S&P 500 finished Friday's session at 1,409.84 —

close to its intraday peak on Tuesday of 1,415.27, its highest level in a little over six years. The S&P 500 is up 12.94 percent so far this year.

The Nasdaq ended on Friday at 2,437.36 — about an arm's length away from its 2006 intraday high of 2,468.42, set on Nov. 24. For the year so far, the Nasdaq is up 10.52 percent.

"It will be interesting to see how the Wall Street folks are making money. We know they're making a lot of money," said Tim Hartzell, senior vice president and chief investment officer at Kanaly Trust Co. in Houston.

"What we'll really be watching for are any surprises or warnings that will be coming through in the next couple weeks for the real earnings season."