Investors Await Retail Earnings, Consumer Spending

Ivory said investors still have the mind-set that started the stock rally in early March. They're focused on whether economic data and corporate reports are showing incremental improvement, even if there are still signs of weakness.

"What we're seeing in aggregate is that bad news isn't necessarily bad news anymore," Ivory said. "It's all relative."

Consumer spending accounts for more than two-third of economic activity. So signs of stronger spending or upbeat outlooks from retailers would give investors incentive to keep buying.

Brett D'Arcy, Chief Investment Officer of CBIZ Wealth Management in San Diego, said a worse-than-expected reading on retail sales or disappointing results from a major retailer might lead to a short-term drop in the market, but only a series of bad reports over a couple of weeks would be likely to derail the rally.

Cincinnati-based Macy's first-quarter results are scheduled to be released Wednesday, while investors hear from Bentonville, Ark.-based Wal-Mart on Thursday. Analysts expect Macy's to post a quarterly loss of 23 cents per share, while Wal-Mart is expected to earn 77 cents per share.

Very little has been able to slow down the market in recent weeks — not even the government saying some of the nation's largest banks are still facing capital shortfalls. The government's stress-test results did just the opposite.