It's probably safe to bet that the coming week will bring another wave of megamerger announcements that could boost Wall Street. But after last week's

Federal Reserve

meeting, traders also may have their eyes a little more intently on the bouncing ball of economic data.

The combination adds up to a dash more uncertainty in the mix.

Last week's economic news served to highlight the contradiction of strong job growth amid a persistently slowing economy. Thursday brought a one-day mood swing on concerns about economic growth amid dismal April chain-store sales and a widening trade deficit. The weak retail sales, though, overshadowed a remarkable plunge in unemployment claims.

"The markets are drowning in data," says Woody Dorsey, president of Market Semiotics, a research firm that specializes in behavioral economics. Dorsey says he sees a lot of exasperation among traders who are tired of having the economic data constantly diverge.

"There's not enough conviction for anybody to claim the growth worry or inflation worry turf," he says, noting that traders are vacillating every day.

The same is true for the Fed, which isn't providing much guidance to the market. The Federal Open Market Committee sat on its hands again last Wednesday, keeping the fed funds rate at 5.25%, as it has at the past seven meetings. The Fed also didn't change its statement except to reflect the most recent data -- noting that the first quarter grew at a slow pace and that inflation still remains above its comfort zone.

Traders have another heavy calendar of inflation and growth data to parse though in the coming week. The consumer price index will be released Monday, and economists expect the headline figure to increase 0.5% for April, while core inflation is projected to show growth of 0.2%.

The markets will also get their first read on the housing market in April, with housing starts and building permits for the month out on Wednesday. Analysts project a modest decline in both measures.

Elsewhere Wednesday, analysts expect a 0.3% increase in April industrial production, an improvement from a 0.2% decline in March. And most expect capacity utilization to remain virtually unchanged.

The New York Empire State Index and the Philadelphia Fed survey, out Tuesday and Thursday, respectively, will provide some insight into regional business activity. Economists and traders may watch the report closely, as they expect the cash-strapped consumer to pass the spending baton to businesses.

"We might be going through a gradual transformation from an economy whose principal driver of U.S. economic activity switches from consumers to producers," says John Lonski, chief economist at Moody's Investors Service.

The stock market's bullish bent may be softening amid the uncertainty. The major indices head into next week having struggled to eke out a small, 0.4% gain on the

Dow Jones Industrial Average

and less than a point on the

S&P 500

. The

Nasdaq Composite

registered a 0.4% loss for the week.

So as sentiment about a potential Fed rate cut swings from hope to no hope and back again, traders may lean on more-certain market factors to drive their decisions. The markets are still awash with liquidity from strong corporate cash hoards and private-equity dollars.

The

shrinking supply of U.S. stocks amid the buybacks-and-buyouts boom remains a driver of the stock market's parabolic rise since early March. But as retail investors have kept funds flowing to international and global equity funds, the force of domestic-equities buying remains a tad mysterious.

The demand might be coming from overseas -- particularly considering the breakouts by large-cap companies that benefit from the weak dollar and overseas sales. Also, other asset classes, such as high-yield bonds and emerging-market equities, are relatively overvalued or more risky.

On Tuesday, investors will learn whether foreign buyers have been helping to support U.S. equities when the Treasury Department reports the net foreign purchases data for March.

On the earnings front, traders will have considerably less corporate data to absorb as the first-quarter reporting season peters out. Still, a few big names remain on the docket, including the first round of reports from retailers, whose quarter ends a month later than most other companies.

TheStreet Recommends

Giants

Home Depot

(HD) - Get Home Depot, Inc. (HD) Report

and

Wal-Mart

(WMT) - Get Walmart Inc. Report

will report on Tuesday, while

J.C. Penney

(JCP) - Get J. C. Penney Company, Inc. Report

,

Kohl's

(KSS) - Get Kohl's Corporation (KSS) Report

and

Nordstrom

(JWN) - Get Nordstrom, Inc. (JWN) Report

will release results on Thursday.

Elsewhere, in tech, look for

Hewlett-Packard's

(HPQ) - Get HP Inc. (HPQ) Report

report on Wednesday and

Intuit's

(INTU) - Get Intuit Inc. (INTU) Report

on Thursday.

Finally, some investors might take this week's hiccup as a sign that the market's ready to top out for the summer. High gas prices ahead of the summer driving season could crimp the consumer even more, portending at least more range-bound markets. But if this year is anything like last year's sell-in-May slump, vacationers should consider coming back in August, not after Labor Day.

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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