Investors are likely to approach the coming week with caution, analysts say, following mixed economic data last week and a sluggish day for stocks on Friday.

The Dow Jones Industrial Average ended the week up 54 points at 9117, while the Nasdaq and the S&P 500 closed the week virtually flat, at 1626 and 988, respectively.

After some uncertain economic news in the past few sessions, including lower-than-expected consumer sentiment and a drop in wholesale prices, analysts say investors may stay on the sidelines until they get more reliable signals that the economy is in fact turning around.

"Markets have had a pretty good run, but economic data have not yet supported a recovery," said John Davidson, president and chief executive at PartnerRe Asset Management. "That has caused some skittishness."

In the past few weeks, markets have rallied amid expectations of a revival in economic activity, despite mixed data that have prompted many to expect the Federal Reserve to cut rates at its June 25 meeting.

Davidson said the real debate is whether the Fed will cut rates by 25 or 50 basis points. But regardless of the Fed's action, "the easing has already taken place by jawboning, with all the talk about the risk of deflation," he said.

"For stocks to sustain the rally, or even stick to these levels, we'll need to see signs of a pickup, with initial jobless claims coming below 400,000. And it doesn't look like we'll see that this week," said Davidson. Initial claims for unemployment benefits fell 17,000 to 430,000 for the week ended June 7, and are expected to have risen to 435,000 last week.

The consumer price index will be released on Tuesday, and markets also will get a reading on the housing sector, followed by industrial production. On Thursday, the Conference Board's index of leading indicators is due.

Daniel Morgan, a fund manager at Noble Financial Group in Florida, noted, "We've had such a big move that you start to wonder how much we can continue from the March lows. We've got to take a breather and refocus on how the numbers start coming together."

On the earnings front, retailers will be in focus, after May retail sales rose 0.1% following a 0.3% decline in April. Analysts say the number indicates demand is still weak. On Tuesday, Circuit City ( CC) and Pier 1 Imports ( PIR) report quarterly earnings, followed by Best Buy ( BBY) and Bed Bath & Beyond ( BBBY) on Thursday.

Analysts also highlighted two other factors that could move the markets this week: window dressing, as fund managers try to include the best-performing stocks in their portfolios before the end of the quarter; and triple witching -- the expiration of stock options, stock indexes and futures contracts -- which could inflate activity slightly this week.

"A standoff could happen, with professionals in the market wanting to preserve profits and taking some off the table," said Bernadette Murphy, chief market analyst at Kimelman & Baird. "On the other hand, we've had an excellent move since the end of the first quarter, so those not in the market may feel compelled to be buyers."

Paul Montgomery, market analyst at Legg Mason, said, "The market is still positive and the numbers are still bullish." But he advised investors to take a cautious approach amid expectations that "data will turn negative before the Fourth of July. The market is getting tired and could roll over anytime."

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