Barrage of Earnings, Economic Data to Drive Market

Investors would like a definitive answer to the question: Is the economy in fact in recovery? The answers this week may not be conclusive, but they might remove some of the uncertainty that has made stock trading choppy lately.

Investors will get the Commerce Department's first report on third-quarter gross domestic product, the broadest measure of the economy's health. The week will also bring reports on housing prices and new home sales, consumer confidence and durable goods orders, a key indicator for the manufacturing industry.

And earnings reports, which investors are viewing as economic data these days, will continue to flow in. Results from companies including Kellogg Co., Procter & Gamble Co. and Visa Inc. will provide more insight into consumer spending. Reports from several major energy companies, including ConocoPhillips and Exxon Mobil Corp., as well as insurers Aetna Inc. and MetLife Inc., are also expected.

Coming off a rocky week, investors are looking for more evidence that the economy is in recovery. The market's volatility has increased as investors contend with mixed messages from earnings reports and economic data, and question whether a seven-month surge in stocks has outpaced companies' earnings potential.

After stepping to new highs for the year on Monday, stocks zigzagged sharply and finished the week slightly lower as optimism about mostly upbeat earnings was offset by disappointment over a housing report, an analyst's downbeat assessment of Wells Fargo & Co. and cautious outlooks from major railroad companies. The Dow Jones industrial average fell 0.2 percent for the week, the Standard & Poor's 500 index lost 0.7 percent, and the Nasdaq composite index slipped 0.1 percent.

"This really appears to be a market that is trying to sort itself out," wrote Dan Cook, senior market analyst at IG Markets Inc., in a research note Friday.

So far, earnings reports have largely exceeded Wall Street's expectations. About 40 percent of the companies that make up the S&P 500 have reported their results, with 81 percent of those beating analysts' estimates. The market wants to see that trend continue.