Friday saw the major stock market indexes fall for the third time in five days. For the day, the Dow was down 1.5 percent, the S&P 500 was down 1.9 percent, and the Nasdaq was down within a hair of two percent. The two days of gains kept the indexes in the black for the week, with the Dow advancing 2.3 percent, the S&P 500 2.2 percent, and Nasdaq 3.6 percent.

Disappointment in profits from retailers, unrest associated with the European financial crisis, and uncertainty over Congressional regulation of credit card fees all contributed to investor wariness in the equity market. With those issues still in play, investors can expect continued volatility on Wall Street in the upcoming week.

First-quarter earnings results have surpassed forecasts for three-quarters of the companies reporting, but investors still seem dissatisfied. Next week, Home Depot (HD) and Lowes (LOW) will both report, and are expected to have benefited from sales of energy-efficient appliances and seasonal gardening products. Wal-Mart (WMT) will also report, and the possibility that its sales have dropped might be viewed as positive inasmuch it could indicate that consumers feel that they can afford to return to their pre-recession favorite shops. General Motors is expected to show a profitable quarter, and Wall Street is hoping to see that restructuring during the company’s bankruptcy will slowly return the company to increasing production.

Economic reports to be released during the week include, on Tuesday, housing starts for the month of April, expected to increase to 650,000 on an annual basis compared to the March figure of 626,000. The producer price index for April is forecast to rise 0.1 percent, far below the 0.7 percent of March.

On Wednesday, the consumer price index for April will be released and is expected to have risen 0.1 percent, just as it did in March. The Federal Reserve will release the minutes of its April FOMC rate-setting meeting, and investors want to see near-zero interest rates remain in effect.

But nothing is likely to overshadow the concern with which investors view the European debt situation. The euro is expected to fall in value for months to come, and spending cuts that were initiated in order for near-bankrupt countries to receive bailout money have investors worried that economic recovery in Europe could falter.

Stocks to Watch

High volatility is making it difficult to find stocks with potential for continued strength. We have just four stocks that we're watching for the coming week.

Medifast, Inc. (MED)
TreeHouse Foods Inc. (THS)
Universal Health Services, Inc. (UHS)
Valassis Communications, Inc. (VCI)

Dave Mecklenburg is the Editor-in-Chief of TigerSharkTrading.com.