All three major stock indexes fell more than three percentage points during Friday’s trading and closed for the day at their lowest levels since last February. For the week, the Dow lost two percent, the S&P 500 lost 2.3 percent and the Nasdaq lost 1.7 percent. The release of the non-farm payrolls report on Friday, which showed that more than 90 percent of all of the jobs created in May were temporary positions for the U.S. Census Bureau, had investors worried that the recovery is stalling; and an announcement by officials of the government of Hungary had investors worried that the European debt crisis could sweep through other countries. Investors exited the equities market and sought safety in currencies, gold and U.S. Treasury bonds.

With those two major destabilizing economic issues still in play next week, investors can expect volatility to remain in the equities markets. The weak labor market means that consumers are able to make fewer discretionary purchases and that credit card balances and defaults may climb, which will affect the retail and financial sectors. Banks will be vulnerable to the possibility of default by nations too deeply in debt now to meet payment obligations.

A few economic reports are scheduled for release at the end of next week. On Thursday, April’s trade deficit is expected to reach $41 billion, nearly half a billion higher than in March. The initial jobless claims numbers are expected to fall slightly.

On Friday, the Commerce Department will release U.S. retail sales figures for May, which will likely show that the increase in sales is only half of April’s increase of 0.4 percent. The consumer sentiment index is predicted to rise to 74.5, compared to the final figure of 73.6 for the month of May.

Stocks to Watch

Continued market weakness means we're left with very few stocks poised to move higher, but we'll watch the following two stocks this week.

Centene Corporation (CNC)
Comstock Resources, Inc. (CRK)

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