NEW YORK – Investors will sort through data on housing, durable goods and inflation plus earnings from companies like FedEx Corp. (FDX) and Morgan Stanley (MWD) next week, but none are expected to pack enough punch to undo the year's gains and derail Dow's push toward 11,000.
And as usual, the market will keep a close watch on the price of crude oil, which closed solidly below $60 a barrel on Friday, easing concerns that high energy costs will pinch corporate and household budgets.
"I think between now and the end of the year, the market is going to have a mild upward bias," said Stanley Nabi, vice chairman at Silvercrest Asset Management Group. "There is nothing that will come out on the economic front next week that will redirect the market."
Factors that have pushed stocks up in recent weeks include data showing the economy is on solid footing as well as the Federal Reserve signaling that its interest-rate-raising cycle was nearing an end.
"I think the market will continue to rally as the economic data continues to improve," said Steve Neimeth, portfolio manager for AIG SunAmerica Asset Management.
"The Consumer Price Index came in 'in line' with expectations, which calmed investors," Neimeth added. "And the Fed commented that they're not particularly concerned about inflation and that they don't seem to be any more aggressive in raising rates."
As of the close of trading on Friday, the Dow was only about 124 points away from the key psychological level of 11,000, which hasn't been seen since June 13, 2001.
For the week, stocks were mixed. The Dow rose 0.90 percent for the week and the S&P 500 gained 0.63 percent, while the Nasdaq dipped 0.19 percent.
Economic data that may influence trading next week includes an inflation gauge, the Producer Price Index, on Tuesday, November leading economic indicators on Thursday, and durable goods orders and a final reading on December consumer confidence from the University of Michigan on Friday.
The forecast for overall PPI calls for a drop of 0.5 percent in November, after a gain of 0.7 percent in October, according to economists polled by Reuters. They expect core PPI, excluding volatile food and energy prices, to rise 0.2 percent in November, after October's drop of 0.3 percent.
Housing starts for November are also due Tuesday, while November new home sales are expected Friday. Those figures will be keenly watched for any additional clues on the health of that once blazing hot market.
"I think right now, even those who were once reluctant to admit it, agree that housing has topped out," Silvercrest's Nabi said. "What will come as a surprise is if the housing starts are really strong, that would probably be a positive rather than a negative."
Economists see November housing starts at a seasonally adjusted annual rate of 2.017 million units, barely changed from the pace of 2.014 million the previous month, according to a Reuters poll. New home sales for November are expected to slow to a seasonally adjusted pace of 1.310 million units from 1.424 million in October, the Reuters poll showed.
Earnings and the outlooks that may accompany the reports will be a focus as the fourth quarter comes to a close.
Quarterly reports due next week include those from electronics retailer Circuit City Stores Inc. (CC), investment bank Morgan Stanley, Nike Inc. (NKE), FedEx and cereal maker General Mills Inc. (GIS).
"I'm very bullish on the stock market and I'm seeing incredibly strong corporate earnings that are persisting and that have greatly surpassed Wall Street's most optimistic estimates," said Doug Cote, senior portfolio manager at ING Investment Management. "That bodes well for the market."
Even so, one analyst cautioned that too many investors were expecting market gains.
"In comparison to the kind of fear we saw back in October, relative to what people are feeling now, right now I think people are starting to become a little bit too complacent," said Dan Chesler, an independent market analyst in Wellington, Florida.
"It's not something that makes me want to go out and short the market right here, but you begin to become more cautious. You begin to temper your bullishness when you see this."