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After days filled with bullish sentiment and stock market highs, traders will spend much of the coming week waiting on news of the broadest measure of the economy -- first-quarter output, or GDP.

Part of what has helped the market recover from its late February mini-correction is traders' renewed embrace of the soft-landing scenario for the economy. After earlier worries about a subprime-borrower-driven meltdown, relief has washed over the market that liquidity remains ample, the job market is tight, and consumers and buyout titans are still spending.

The change of heart happened partly because of happy surprises.

Earnings have been unexpectedly good. The

S&P 500

thus far is logging 5.2% year-over-year growth, compared with estimates for 3.3%, according to Thomson Financial. The March employment report was strong at 180,000 jobs added, compared with expectations for 135,000, and retail sales were surprisingly healthy. The trade deficit was smaller than expected, while housing starts and building permits turned up slightly.

But that doesn't mean that GDP, which is one of the stock market's biggest movers, will be back up to "trend" growth of over 3%. The Commerce Department's first estimate of the figure -- there are three total -- comes Friday, and the consensus of analysts puts growth at 1.8%.

IDEAglobal's Joe Brusuelas says the three estimates may take the opposite path from last quarter's string of reports. For the fourth quarter of 2006, the first estimate was 3.5%, while the final analysis revealed growth of only 2.5%.

This time around, Brusuelas writes, the

Federal Reserve

has indicated that due to flaws in estimating auto sector industrial production, the initial estimate will likely underestimate the true growth rate. He adds that investors should largely disregard this first number and wait for the final estimate, as he outlined in an

interview on TheStreet.com TV Friday.

"The impact on the markets from the Q1 GDP should place an emphasis on risk to growth, and a sub-2% print will be a bullish affair for the fixed income market and may put a lid on the rather sunny narrative of the economy that the equities markets have been providing of late," writes Brusuelas.

That said, depending on investors' mood, they may cheer a weaker growth number if they believe it means the Fed shifts from hawkish talk to a possible rate cut. After this week's benign report on consumer inflation, Wall Street's rate-cut hopes could well return.

The Nitty Gritty

GDP is tied with the monthly jobs data as the most market-moving report if it is a surprise, according to Jan Hatzius, an economist at Goldman Sachs. In a study of the impact of economic data on equities markets, the firm found stocks respond most to information that provides a broad look at the economy, rather than the nitty gritty individual elements within it.

Even so, investors will have plenty of nitty gritty data to chew on next week if they so choose. March figures on existing-home and new-home sales will be released Tuesday and Wednesday, respectively, and Randy Diamond, trader at Miller Tabak, says the numbers will be particularly important.

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He notes that March is the start of the spring home selling season, which is the wild-card for determining how close the housing market is to a bottom. Tighter lending standards triggered by increasing defaults on subprime loans suggest that the ballooning eight-month inventories of new homes will not decline, he says.

Analysts are predicting new-home sales will increase to a rate of 885,000 units on an annualized basis, up from 848,000 in February. Existing-home sales are expected to fall to a rate of 6.5 million homes from 6.69 million the prior month.

Likewise, investors will be watching Wednesday's March durable goods orders report carefully for more signs about the disturbing weak business spending trend at play in the economy.

Analysts predict durable goods will rise 2.8%, up from a 1.7% rise in February, though the data likely will be skewed by

Boeing's

(BA) - Get Boeing Company Report

strong orders. Excluding transportation, analysts expect orders to be flat on the month.

The Federal Reserve's inter-meeting report on economic conditions, to be released Wednesday afternoon, may also provide some insights into business spending.

Another Earnings Deluge

The week ahead also brings the meat of earnings season, with 177 companies in the S&P 500 reporting.

One of the key reports will be

Microsoft's

(MSFT) - Get Microsoft Corporation Report

, out Thursday, because of its potential to insight into the status of capital spending. Analysts are predicting 44% year-over-year growth for the tech giant's fiscal third-quarter earnings, representing high hopes that the new Vista operating system garnered enthusiasm in the business community.

But before Microsoft, the week kicks off Monday with reports from the likes of

Boston Scientific

(BSX) - Get Boston Scientific Corporation Report

,

Hasbro

(HAS) - Get Hasbro, Inc. Report

and

Texas Instruments

(TXN) - Get Texas Instruments Incorporated Report

.

Tuesday's reports include

Lockheed Martin

(LMT) - Get Lockheed Martin Corporation Report

,

Coach

(COH)

and

Sun Microsystems

(SUNW) - Get Sunworks, Inc. Report

. On Wednesday, look for

Apple

(AAPL) - Get Apple Inc. Report

,

Corning

(GLW) - Get Corning Inc Report

and

ConocoPhillips

(COP) - Get ConocoPhillips Report

.

Aside from Microsoft, Thursday's big reports include

Ford

(F) - Get Ford Motor Company Report

,

3M

(MMM) - Get 3M Company Report

,

ExxonMobil

(XOM) - Get Exxon Mobil Corporation Report

and

XM Satellite Radio

( XMSR).

While the pace winds down on Friday, the market will still see reports from

Burger King

(BKC)

,

Ingersoll-Rand

(R) - Get Ryder System, Inc. Report

and

Goodyear

(GT) - Get Goodyear Tire & Rubber Company Report

.

In the grand scheme, earnings are unlikely to suddenly underperform the expectations that were set so low.

"We feel companies will continue to beat expectations because guidance wasn't more negative

ahead of earnings season, it was just less positive," says David Dropsey, senior research analyst at Thomson Financial. "Less optimism doesn't necessarily mean less business."

In keeping with TSC's editorial policy, Rappaport doesn't own or short individual stocks. She also doesn't invest in hedge funds or other private investment partnerships. She appreciates your feedback. Click

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