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Monday, May 11, 2009

Stocks: Trying for week 10

After managing gains for more than 2 months, investors are looking to ride the momentum for another week.

NEW YORK ( -- For Wall Street to stretch its spring stock run to a tenth straight week, investors may need a little extra ammunition - and some good news on the consumer front.

Stocks have been on a tear since early March, with the Dow and S&P 500 both rising for 8 of the last 9 weeks and the Nasdaq advancing for 9 in a row.

The Dow and S&P 500 both closed at more than 12-year lows on March 9th. Since then, the Dow has gained 31%, and the S&P 500 has gained 37.4%. Since closing at a more than six-year high on March 9th, the Nasdaq has gained 37%.

Wall Street ended last week on a high note after the government said employers cut fewer jobs than expected last month - and finally released the results of the financial sector's stress tests. The results showed that many of the nation's biggest banks need more money to withstand a possibly steeper economic slowdown. Yet, the results were far less dire than many people expected.

That willingness to focus on the positive, or at least the "less bad" news, has propelled stocks for weeks and is likely to keep doing so in the weeks ahead.

"The glass is being seen as partly full instead of empty, even when we have bad news," said Tom Hepner, financial advisor at Ruggie Wealth Management. "As the run continues, people become fearful of missing the train."

That wariness of missing out could lift stocks in the week ahead, as investors eye reports on retail sales, consumer inflation and Wal-Mart Stores' profits.

On the docket

Monday: Federal Reserve Chairman Ben Bernanke gives the keynote address at the Federal Reserve Bank of Atlanta's Financial Markets Conference. He is expected to discuss the results of the stress tests. The conference runs through Wednesday.

Tuesday: The March trade gap from the Census Bureau, due out in the morning, is expected to have widened to $29.2 billion from $26 billion in February, when it hit the lowest level in over 9 years.

Also on tap: The National Association of Realtors releases its report on first-quarter median home prices; the Senate Finance Committee holds a hearing on funding health care reform; and Treasury releases its April budget.

Wednesday: Last week, the nation's chain stores reported a mixed bag of April sales. This week, the broader industry report is due from the Commerce Department.

April sales are expected to have fallen 0.1% after falling 1.2% in March. Sales excluding volatile autos are expected to have held steady after falling 1% in March.

Also on tap: Government reports on April import and export prices, March business inventories and weekly crude inventories.

Thursday: The government's April Producer Price index (PPI) is due out before the start of trading. The PPI, a measure of wholesale inflation, is expected to have risen 0.1% after falling 1.2% in the previous month. The so-called core PPI, which strips out volatile food and energy prices, is expected to have risen 0.1% following a flat reading in March.

Wal-Mart Stores (WMT, Fortune 500) is due to report quarterly results before the start of trade. Wal-Mart is expected to have earned 77 cents per share versus 76 cents a year earlier.

Also on tap: The weekly jobless claims report from the Labor Department.

Friday: The government's consumer price index (CPI) for April is expected to be unchanged after falling 0.1% in March. The core CPI is expected to have risen 0.1% after rising 0.2%

The NY Empire State Manufacturing index for May is expected to have declined to a reading of -15 from -14.65 in April. Any reading that is negative shows continued weakness in the sector.

Reports are also due on April capacity utilization and industrial production and the early reading on May consumer sentiment from the University of Michigan.

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