Economic news -- including a Federal Open Market Committee meeting -- and a dash of corporate earnings will fill the coming week's bill of fare. But fear of further terrorism could easily trump any financial event.

U.S. markets bounced back Friday after plunging on reports that al Qaeda might have had a hand in the bombings that killed 198 people in Madrid. The rally couldn't salvage the week, however, as the Dow ended down 336 points, or 3.4%, over the five sessions, while the Nasdaq lost 3.1%.

Investigators are still trying to determine who placed the bombs. But Thursday afternoon's plunge illustrates how exposed financial markets remain to exogenous shock.

"I think that it's a wake-up call to people that this is not over," said Bill Rhodes, chief investment strategist at Rhodes Analytics. "It is a knock on the door of the Europeans." Rhodes thinks memories of the attack could hang over the market next week.

"Markets sell off on bad military news and tend to rally on good political news," said Rhodes. "What happened Thursday is a bad military event. This is a war. This is a full-fledged war."

Peter Cardillo, chief market analyst at S.W. Bach & Co., also doubted the market could overcome its jitters. "I suspect that with the market being high, it could run into pressure every time there is talk or threats of terrorism."

If the terror threat isn't enough to worry investors, next week's meeting of the Federal Open Market Committee should be. Cardillo expects that interest rates will remain the same, but said the Fed's language "will indicate that, if need be, they will raise rates."

Jeff Kleintop, chief investment strategist at PNC Financial Services Group, noted the important relationship the Fed has with the jobs data. He said that because the Fed has upgraded its assessment of the labor market in its last three statements, investors will be eager to hear what it says next week.

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