Stocks may spend more time treading water during a holiday-shortened week as investors scour a fresh batch of economic reports for signs that U.S. growth is gathering momentum and wait to get a peek at the crucial holiday shopping season.
Reports on consumer confidence, orders for costly manufactured goods, personal income and spending, third-quarter U.S. growth and the Federal Reserve's anecdotal take on the economy will give traders something to chew on.
"Barring an exogenous shock, we're going to continue to look to the economic data to get a sense as to whether this is going to be a sustainable economic rally in 2004 or a one-quarter, tax-induced head fake," said Richard Nash, chief market strategist at Victory Capital Management.
Still, more confirmation that the economy is regaining its health may not be enough to spur investors to resume their recent stock buying spree in a major way. In addition, a shortened trading week could sap some of the significance from the market's near-term moves. U.S. financial markets are closed Thursday for the Thanksgiving holiday.
"It really is going to be a fairly quiet week," said Rick Meckler, president of investment firm LibertyView Capital Management.
Wall Street will reopen for a shortened trading session Friday.
But many investors will be taking the day off, leaving trading floors with just a skeleton staff and trading volumes thinned, analysts said.
Investors also will want to wait until the days shortly after Thanksgiving -- generally viewed as the unofficial start of the holiday shopping season -- for hints on how strong consumer spending is likely to be during that key period.
In the week's economic news, the Conference Board's November consumer confidence index, due Tuesday, is expected to show modest gain to 85 from 81.1 last month, according to a survey of economists.
Those economists also predicted that durable goods orders, due in a report Wednesday, rose 0.8% in October, after a revised gain of 1.1% the previous month.
Weekly jobless claims data will be particularly key after first-time claims for unemployment benefits fell more than expected Thursday.
Economists predicted claims in the week ended Saturday would total 360,000, an increase from the 355,000 claims filed in the previous week.