Inflation data and potential earnings surprises will give the market spice in the holiday-shortened coming week. "Last week we saw earnings pre-announcements and a higher-than-expected producer price index move stocks," says Brian Williamson, equity trader at Boston Company Asset Management. "Next week, we expect more earnings surprises and the CPI to provide the volatility." Stock and bond markets will be closed Monday in observance of Martin Luther King Jr. Day. When traders return Tuesday, they will be treated to capacity utilization and industrial production figures for December. Economists surveyed by Thomson First Call expect utilization to increase to 80.5% from 80.2% the prior month. On the production end, they are looking for a slight decrease to 0.6% from 0.7% in November. The December consumer price index should dominate trading on Wednesday as creeping energy prices are once again sparking inflation fears. Economists expect the CPI to rise 0.2%, a big jump from November's decline of 0.6%. The core CPI, which excludes food and energy, is anticipated to remain flat from November at 0.2%. Higher energy prices kept wholesale inflation humming in December. The Labor Department said Friday that its producer price index rose 0.9% last month, more than twice the rate economists expected. The gauge, a key metric in the Federal Reserve's interest rate policy, rose by 0.7% in November. Excluding food and energy, December's so-called core PPI rose 0.1%, slightly below expectations. Contributing to the 0.9% gain in the headline number was a 12.3% rise in gasoline prices, which helped pace a 3.1% increase in overall energy costs. "After the PPI bounced last week due to higher energy costs, there is a big risk of the CPI following suit next week," says Jason Schenker, economist at Wachovia. "There is significant upside risk there."