On Friday, each of the three major market indexes edged up a fraction of a point. For the week, the Dow rose 2.3 percent, the S&P 500 rose 2.4 percent, and the Nasdaq rose 3 percent. The Dow has now regained nearly half of the losses it incurred since its high for the year on April 26. Analysts note that the recent gains came rapidly and on low volume and thus are less likely to be sustainable.

Still, the S&P 500 has overcome resistance posed by its 200-day moving average, and that, coupled with the Dow’s performance, has investors hopeful that the market correction might be resolved. But investors also know that market direction is susceptible to news events and politics, and they are still wary of economic data that points to the weakness of the recovery.

The upcoming week’s economic reports will not all be good news for investors. On Tuesday, data for existing home sales will be released. While the figure for May exceeds that of April by six percent, it reflects purchase contracts signed while the home buyer tax credits were still in effect. On Wednesday, new home starts for May, the first month after tax credits expired, will show an annualized rate of 420,000, compared to the April figure of 504,000.

Also Wednesday, the Federal Reserve’s rate-setting meeting concludes. Analysts expect that no interest rate changes will be announced, and that the Fed will wait for job creation to lower the unemployment rate before it announces rate hikes. Investors will also be listening for any hint that the Fed may be concerned about Europe’s debt situation. Wednesday also brings final figures for third-quarter GDP, showing a gain of three percent, the same as the preliminary number; and for June’s final consumer sentiment index number, expected to be 75.5, the same as earlier June figures.

Thursday will bring durable goods orders data for the month of May. It is expected that May orders will be down 1.1 percent, compared to April’s orders which showed an increase of 2.8 percent. Thursday will also bring the weekly figures for initial unemployment compensation filings. Although the numbers are expected to fall to 464,000 from last week’s 472,000, the decrease will be attributed to long-unemployed workers giving up the search for jobs.

Stocks to Watch

The stock market rallied last week, but we only have four stocks to watch this week for continued strength.

Coeur d'Alene Mines Corporation (CDE)
Comerica Incorporated (CMA)
Endurance Specialty Holdings Ltd. (ENH)
Western Digital Corp. (WDC)

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