Stocks Could Sputter With Black Friday Eyed

NEW YORK (Reuters) - U.S. stocks could sputter next week as volumes dry up in holiday-shortened trading and with a slew of economic reports likely to illustrate the recovery is still fragile.

Investors will also get a glimpse of how holiday shopping could shape up with Black Friday, which traditionally marks the start of the season as retailers slash prices to tempt shoppers. It will be difficult for the economic recovery to make much headway without a pick-up in consumer spending as it accounts for two-thirds of the economy.

A raft of data is squeezed into the first half of the week, shortened by Thursday's Thanksgiving holiday. The delicate nature of the recovery has analysts split on whether the economy will advance from here or still faces another leg down.

The debate has plagued the rally throughout its run but now that the S&P 500 is up more than 60 percent from March's 12-year lows, investors are more wary of taking risks. With just six trading weeks left in the year, market watchers are keen to hold onto profits.

"There's simply more risk where we are," said Lawrence Creatura, equity market strategist and portfolio manager at Federated Clover Capital Advisors, in Rochester, New York.

"We're at a higher altitude and even though in some ways it doesn't feel like it, it's less safe now than it was in March."

Data has largely shown an economy that is recovering slowly but is still weak, particularly in areas like employment. Reports include home sales, consumer confidence, durable goods and the second reading of gross domestic product.

As well, the Federal Open Market Committee will release the minutes from November's rate-setting meeting. Investors will be looking for insight as to how the central bank will eventually start to remove its extraordinary stimulus measures and its view on the health of the economy.

The Dow and S&P 500 made 13-month highs this week before easing off, and recent sessions suggest the market is struggling to justify more gains.