The three major indexes were all up for the day on Friday: the Dow gained 1.3 percent, the S&P 500 gained 1.5 percent, and the Nasdaq gained 1.1 percent. But three days of losses earlier in the week resulted in another negative week for Wall Street. The Dow was down four percent, the S&P 500 was down 4.3 percent, and the Nasdaq was down five percent. The week’s slump put all three indexes into correction mode.

Now investors are wondering whether last week’s correction could become the next bear market or whether stock prices are so low that they’re ready to snap back. Volatility is certain to be a force in the upcoming week’s market action.

Next week’s economic data focuses on the housing market. On Monday, existing home sales for April are expected to be six percent higher than for April 2009. That translates into an annual figure of 5.6 million, compared to the annual figure of 5.8 million based on March sales. Tuesday brings the Case Shiller index, based on home prices in 20 cities, which is expected to reflect a decline of 0.3 percent. On Wednesday, April new home sales are expected to come in at 420,000, a gain over March’s 411,000. The federal tax credit, now expired, is a factor in the increased number of home purchases this spring.

On Thursday, the revised first-quarter GDP will likely be 3.4 percent, up from the original estimate of 3.2 percent. That day will also bring the weekly initial unemployment claims figure, thought to have increased over last week’s figure, which was also an increase. Two consecutive weeks of rising unemployment will cause further unrest on Wall Street as investors worry about recovery in the labor market. The national unemployment rate now stands at 9.9 percent.

International finances continue to impact the stock market, too. Uncertainty still remains over whether Greece’s fiscal situation can expand into a financial crisis for all of the nations in the Euro-zone and, ultimately, for the global financial institutions. But the extreme budget cutbacks required to demonstrate fiscal responsibility on the part of Greece and other countries with huge deficits carry the risk of squelching economic recovery in Europe which would lead to falling equity and commodity prices.

Stocks to Watch

Last week's market correction left few strong stocks to watch for the coming week. We'll watch a few stocks on continued strength and pullbacks.

Advance Auto Parts, Inc. (AAP)
Briggs & Stratton Corporation (BGG)
Humana Inc. (HUM)
TreeHouse Foods Inc. (THS)

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