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. Last Updated: 07/27/2016

U.S. Girds For Week Of Market Suspense




NEW YORK -- Wall Street, haunted by the specter of rising interest rates and fresh off its stiffest weekly loss of the year, is braced for a suspenseful week that should go a long way to clarifying the near-term outlook for the economy, rates and the markets.


Exchanges close Monday for the U.S. Memorial Day holiday but after that comes a rapid-fire series of reports on the U.S. economy.


The National Association of Purchasing Managers index, a closely-watched monthly measure of manufacturing activity, will be released on Tuesday. That report, for the month of May activity, will be followed with U.S. data on Wednesday for April new home sales and on Thursday for April factory orders.


The reports culminate in Friday's report on May nonfarm payrolls data. With the Federal Reserve having switched its bias to tightening and little other news expected before the start of summer, investors will eye the data carefully.


"We're cramming in a ton of data and the next real true barometer is the employment report," said Bryan Piskorowski, market analyst at Prudential Securities.


Wall Street's fear is that the Fed's policy-setting group, the Federal Open Market Committee will find in the data a reason to pull the trigger on interest rate policy, perhaps raising rates as soon as its meeting in late June or, as many see more likely, the next one in August.


Analysts polled by Reuters expect a 219,000 increase in nonfarm payrolls and an unemployment rate of 4.3 percent as well as a 0.3 percent increase in the average hourly earnings component of the figure.


Absent new reasons to fret on the interest rate front, some said buying opportunities could emerge in sectors that sold off sharply last week. For the week, the Dow Jones industrial average fell 269.54 points to close at 10,559.74.


"This week the retail sector, financials, Internets and large cap tech stocks got hit hard and I would look for buying opportunities in these stocks," said Vikram Kapur, vice president of sales and research at Guzman & Co.


Money managers say recent wild price swings reflect changes in asset allocations that may already be winding down.


Investors will cast a wary eye on the international picture as well, particularly on developments in Pakistan, India, Kosovo and Latin America. On the corporate front, MCI WorldCom hosts an analysts' meeting in New York on Wednesday. Wal-Mart, the nation's largest retailer, holds its annual meeting at the Bud Walton Arena in Arkansas on Friday.