Even if the economic news proves to be good next week, analysts say the market's reaction to it likely will be muted.
Investors will have a slew of economic reports to chew on in the week ahead, including a second reading on second-quarter gross domestic product, home-sales data and a couple of consumer confidence reports.
"We're expecting higher homes sales, an uptick in the GDP numbers and jobless claims to be under 400,000 again, so if things come in anywhere near expectations, we'll be in good shape," said Art Hogan, chief market analyst at Jeffries. "Unfortunately, I don't know how many people will notice."
Hogan said volume continues to be very light, with many people still on vacation. He also noted that the market has been bumping up against some important resistance levels recently.
Dow Jones Industrial Average
hit a 14-month high last week while the
briefly pushed past 1800 for the first time since April 19, 2002.
"We've had trouble getting through those levels, there's a lot of resistance at 9500 and 1800," Hogan said. "But even if we closed above those levels, people wouldn't give much credence to it because there's not enough volume to confirm the move."
Hogan said he expects no significant moves in either direction next week. And John Hughes, market analyst at Shields & Co., agrees.
"Going into next week, some of the numbers will improve but it is the last week of the summer and we don't have a lot of volume to hold things up," he said.
Hughes thinks the market will see "a lot of backing and filling," but he still believes the fundamental backdrop is "very positive."
The first economic release of the week will come on Monday, when existing home sales for July are reported. Analysts are calling for an annual rate of 5.90 million, compared to 5.83 million in June. Then on Tuesday, new home sales are due for release. Analysts expect sales to fall to an annual rate of 1.14 million vs. 1.16 million.
With mortgage rates jumping sharply over the past two months, some analysts worry that home sales will weaken going forward. But for the time being, at least, it doesn't look like a big slowdown is in the cards. This week, the Commerce Department reported that July's housing starts rose to their highest level since April 1986.
Also on Tuesday, durable goods orders for July are expected to be reported. Analysts are calling for these orders, which are typically very volatile, to rise 0.9% after a 2.3% gain in June. Durable goods orders offer a glimpse into manufacturing and can give some insight into business spending.
The Conference Board's consumer confidence report for August is also on tap for Tuesday. Analysts expect a reading of 79.7 vs. 76.6 in the prior month.
On Thursday, second-quarter GDP growth is expected to be revised up to 2.9% from 2.4% and on Friday personal income and spending data, the Chicago purchasing manager's report and the University of Michigan's consumer sentiment survey for August are all due out.
While the second quarter reporting season is largely over, a few stragglers will release their results next week. On Monday,
( ACF) will finally report after delaying the release of its numbers to review its accounting.
will announce their results on Tuesday, followed by retailer
on Wednesday and