With a lack of big corporate earnings news, economic reports will drive the markets in the last full week of 2003.

"Look for economic-related volatility," said Seth Scholar, senior research analyst at Sand Hill Advisors. "Whenever you have a combination of light volume and significant economic reports, you get some volatility."

While investors don't expect the

Dow Jones Industrial Average

and

S&P 500

to reverse the new 19-month highs they hit last week, it's unlikely these indices will reach any new milestones either, partly because of the Christmas holiday. The big question is if and when the

Nasdaq Composite

will close above the 2000 mark. Paul Nolte, director of investments at Hinsdale Associates, expects stocks to gain no more than 1% overall.

Both the

New York Stock Exchange

and Nasdaq will close at 1 p.m. on Wednesday, Dec. 24, and Friday, Dec. 26, with Christmas Day off in between. As a result, investors say, volume will be weak.

Despite the shortened trading week, economic news is relatively heavy. The final reading of third-quarter gross domestic product is released on Tuesday; economists expect it to remain at 8.2%. Also Tuesday, November personal income and spending figures will be released. Personal income is seen up 0.4%, while spending is seen up 0.7%. Finally, the revised December University of Michigan consumer sentiment reading is seen at 91.0, from a prior reading of 89.6.

On Wednesday, durable-goods orders are expected to rise 0.6% in November on top of October's 3.3% increase. Initial jobless claims for the week ended Dec. 20 will be out and are expected to fall from the prior week's level of 353,000, remaining below 400,000 for the 12th consecutive week, thus confirming the continuation of the labor market's improvement. Also out Wednesday will be new-home sales. Economists expect a slight increase in November to 1.11 million units on an annual basis, from October's 1.105 million rate.

Stocks will mostly react to the personal spending, Michigan sentiment and initial jobless numbers if they come in much above or below economists' estimates, Scholar said.

Whatever general sentiment exists at the start of the week will likely persist through for the rest of it, believes Daniel Morgan, an analyst at Noble Financial Group. He expects the overall feeling to be positive, mainly because the final third-quarter GDP and Michigan sentiment readings are expected to be unchanged to modestly up.

"I expect the lower holiday trading volume to trade on the upside," said Morgan. "There doesn't seem to be anything on the horizon from corporate profit or economic news that we don't already know."

Scholar, who has been keeping a close eye on employment numbers, is curious about the initial jobless claims data on Wednesday. This report "does move things. A lot of the macro environment pieces have fallen into place, but the employment numbers have been dicey. This one of the bunch will be interesting," he said.

Nolte also expects a continuation of the generally positive economic news of late. He is looking forward to Wednesday's durable-goods orders to rise at least in line with analysts' estimates.

"There seems to be a shift going on between the consumer and corporate America," Nolte said. "Consumers are tapped out," he said, citing

reports last week from

Wal-Mart

(WMT) - Get Report

and

Target

(TGT) - Get Report

showing a decrease in demand because consumers are holiday shopping closer to the end of the month.

But he noted that spending from corporate America is picking up. "We're seeing pricing gains from basic material companies that are sticking," Nolte said. He cited a pickup in capacity utilization and

the increase in the chip-equipment book-to-bill ratio, both of which point to better durable-goods numbers.

For Nolte, the personal income and spending numbers will be the week's other important economic data, because they will show how much consumers are actually spending.

Any earnings reports will be released in the first half of the week. They include

ConAgra Foods

(CAG) - Get Report

,

PalmSource

( PSRC) and

Research In Motion

( RIMM) on Monday, and retailer

Christopher & Banks

(CBK) - Get Report

and

Micron

(MU) - Get Report

on Tuesday.

"None of these are market-moving reports," said Scholar, adding that Micron's results could be "somewhat interesting." They are highly followed with regard to gauging the technology sector, he said.