NEW YORK ( TheStreet) -- First-quarter earnings season has exceeded Wall Street's low expectations but now the economic data will need to cooperate if stocks are going to rally much further from here. Wednesday's mixed session was the equivalent of treading water. The shortfall in the Automatic Data Processing private payrolls report was especially surprising after Tuesday's strong read on manufacturing activity from the Institute for Supply Management, and economists and traders alike were struggling to reconcile the two. Paul Ashworth, chief U.S. economist at Capital Economics, broke down the mixed message in the data and what it may mean for Friday's government employment numbers in commentary on Wednesday. " T he ADP survey suggests that manufacturing employment shrank by 5,000 last month, compared with a 23,000 increase in March, whereas the employment index in the ISM survey continued to strengthen last month," Ashworth wrote. "Obviously, the weak ADP reading means that there are now clear downside risks to our estimate that the official non-farm payroll employment figures will show a 175,000 gain. Indeed, it is possible we could see a repeat of March, when payrolls increased by only 120,000." The disconnect in the data explains why the major U.S. equity indices stalled out on Wednesday with investors unsure what to give the most credence. Corporate earnings were strong enough to get stocks out of their recent rut but the overall results (and guidance) are still more solid than stupendous. That won't be enough to inspire more buyers at these levels. "With the 1Q reporting season largely complete, we believe most earnings-related news has already been priced into the market," wrote Jonathan Golub, strategist at UBS, on Wednesday. "As a result, we expect investors to begin shifting their focus from corporate profits to incoming economic data. Notably, while strong earnings have carried stocks higher through the latter half of April, broader economic readings have been more mixed." Golub maintained a year-end price target of 1475 for the S&P 500, an increase of more than 5% from Wednesday's close at 1402, but he's expecting the week's two remaining big economic reports -- Thursday's ISM services index and Friday's official jobs report for April -- to "set the market's tone" for May.