The week ahead promises to be action-packed, but Wall Street's well-wishers are focusing on the march of democracy.

February sweeps in Tuesday with a

Fed

meeting, followed by President Bush's State of the Union address Wednesday. Auto sales reports and jobless numbers will offer a glimpse at the economy's workings, and of course there will be the requisite barrage of big earnings reports.

But even with all that going on, investors expect the market to be riveted by what happens in Iraq. There's hope that a successful election will finally let investors exhale after a hair-raising ride in January.

"If the Iraqi election goes well and a parliament is elected without too much trouble, then it will allow Americans to think we will pull the troops home sooner rather than later," says Robert Pavlik, portfolio manager at Oaktree Asset Management. "On the other hand, if there are significant problems on Sunday, then the American public could feel that we are in for a very long haul over there, which means the drain on assets -- and nerves -- will continue."

So even with outfits like

Exxon Mobil

(XOM) - Get Report

,

Boeing

(BA) - Get Report

and

Northrop Grumman

(NOC) - Get Report

on deck, what happens in the Middle East could decide whether stateside stockholders finally get to don the rally caps many had seen as 2005's must-have fashion accessory.

"Everything revolves around the Iraqi election," says Richard Williams, chief market technician at Garban Institutional Equities. "From a technical standpoint we are at an inflection point. If things go well over there, we could see the

S&P

rally in February to 1197 from 1167. But the pattern could get really ugly if things don't turn out so well, with the S&P hitting last August's lows of 1090."

Monday will lead off with earnings reports from Dow components Exxon Mobil and

Walt Disney

(DIS) - Get Report

, along with personal income and personal spending numbers for December. Economists expect personal spending to be up 0.8%, compared with 0.2% in the prior period.

On Tuesday, Alan Greenspan will convene the Fed's latest get-together, focusing investors on the ever-present rate debate. Detroit's Big Three will offer up their latest sales figures at a time of creeping anxiety over slipping performance at

GM

(GM) - Get Report

and

Ford

(F) - Get Report

. After the close,

Google

(GOOG) - Get Report

will post what is expected to be a blockbuster fourth quarter.

Wednesday, Greenspan and the Federal Reserve are expected to boost interest rates by a quarter-point, to 2.5%. Most of Wall Street's interest will be vested in how the Fed sizes up the inflation risk in its postmeeting policy summary. Expect earnings from Boeing, Northrop and Texas-based utility

TXU

(TXU)

.

On Thursday, we'll get the latest from the newly betrothed razor blade titan

Gillette

(G) - Get Report

. On Friday,

Time Warner

(TWX)

will report earnings, but that will almost certainly take a back seat to a key piece of economic data.

The biggest economic indicator of the week, the nonfarm payrolls number, is due to be released at 8:30 a.m. EST Friday. Economists are calling for 215,000 jobs to be added in January, up from a gain of 157,000 in December.

Aside from the Iraqi elections and the job numbers, the Fed's Wednesday policy commentary looks like the week's signature event.

"The market wants to see where they are in terms of inflation," says Oaktree's Pavlik. "Too much talk about inflation will certainly scare the market."