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Jobs And Housing Will Lead Market

This article is more than 10 years old.

Hoping for signs the recession is moderating, investors in the coming week will likely focus on employment data showing the rate at which companies are shedding workers. Payroll figures due out Thursday are expected to reveal the U.S. economy lost 355,000 jobs in June, a slightly greater drop than May's loss of 345,000 jobs, which was fewer than expected. Unemployment will likely hit 9.6%, up from May's reading of 9.4%, which at the time was higher than many had expected.

While those numbers depict a badly wounded economy, stock markets have rallied since their March lows on evidence that the recession could be slowing. From March 9, when the S&P 500 sank to its lowest point in 12 years, to Friday's close, the index has bounced back 36%. Last week, the major indexes waffled, with declines early in the week and gains later on. The Dow Jones industrial average lost 1.2% for the week; while the S&P declined 0.3%. The Nasdaq Composite Index gained 0.6% as some tech companies revised upward their full-year forecasts. (See "Stocks End Week Mixed.")

Also next week--four trading days, as markets will be closed Friday in observance of Independence Day--we'll get the S&P/Case-Shiller report on home prices. Real estate activity has been a major driver of market sentiment recently, and experts predict home prices will show a nearly 19% drop in April from the year-ago period. The numbers are due Tuesday, along with a reading on consumer confidence from the Conference Board.

More data on employment will hit Thursday with the weekly release of unemployment claims, which have boosted investor optimism lately. Factory orders for May will also be reported Thursday. (See "Street Looks To Jobs Report, Earnings.")

Aside from economic data, investors will be gearing up for earnings season, which will kick off July 7 with Alcoa's results. Buzz is likely to surround any company that hints at a good quarter or gives analysts a sneak-peek at results. Anticipation could lend extra weight to the handful of companies that report regularly next week. Monday, private equity firm Apollo Group is expected to report a profit of $1.12 a share, up from 85 cents last year.

Confessed Ponzi schemer Bernard Madoff is scheduled to be sentenced Monday after he pleaded guilty to bilking investors out of $65 billion. The St. Louis Federal Reserve president will speak Tuesday about how the government will extricate itself from the bailout policies of the crisis; the president of the Kansas City Fed will comment on bankruptcies.

Thomson Reuters contributed to this report.