Wall Street stocks are expected to gradually move higher this week as investors look past one of corporate America's worst quarters in years and cling to hopes the weak economy will soon turn the corner.
The market's mood could hinge largely on a slew of important economic data, including a key gauge of the manufacturing sector, the government's monthly employment report and data on personal income and spending.
"The market is looking for some clear sign as to where the economy is heading," Mr Peter Gottlieb, portfolio manager at First Albany Asset Management, said.
Recent data, including Friday's stronger-than-expected U.S. growth data, indicate a recovery is beginning, Mr Gottlieb said. "If that is confirmed by next week's data, I think that would be a positive for the market."
Technology stocks slid last week, but many analysts said Wall Street has held up reasonably well in recent sessions in the face of a mixed bag of earnings reports.
"There is increasing confidence that the worst is over," said Mr Uri Landesman, chief investment officer at AFA Management Partners LP., noting that many investors have not been reacting as dramatically to bad news.
One of the factors behind investors' change of attitude was the Fed's surprise interest rate cut less than two weeks ago, when it slashed short-term interest rates by half a percentage point - its fourth rate cut this year - in a bid to rejuvenate the U.S. economy.