REFILE-Wall St Week Ahead: Stocks face jobs, Greece and Goldman

(Refiles to correct stock symbol for Goldman Sachs in
paragraph 4 to (GS.N: ) and not (GPS.N: ))

By Leah Schnurr

NEW YORK, April 30 (BestGrowthStock) – April’s jobs report and a
slew of other economic indicators may bolster U.S. stocks (Read more about the stock market today. )
next week, but jitters over Greece’s debt and investigations
into Goldman Sachs will test the market’s resiliency.

Stocks could also get a lift as earnings season rolls
along with investors expecting more strong results. Though
some big names are already out of the way, three Dow
components — Kraft (KFT.N: ), Cisco (CSCO.O: ) and Pfizer (PFE.N: )
— are on tap.

Key economic reports on the manufacturing, housing and
services sectors will be released throughout the week, but the
main event will be Friday’s non-farm payrolls report for
April. The data is expected to show the economy added jobs for
a second month in a row, with an increase of 200,000 jobs
expected in April by economists polled by Reuters.

But probes into Goldman Sachs (GS.N: ), efforts to alleviate
Greece’s debt crisis and a massive oil spill in the Gulf of
Mexico could steal the spotlight and test stocks’ gains.

“It could be a wild one. I think we’re going to have added
volatility next week,” said Joe Benanti, managing director at
Rosenblatt Securities in New York.

“Seeing the S&P swing around a bit gets some of the
deadwood off the sidelines and you start to figure out what
the real basis of this market is … I think a slow steady
gain is still in the cards.”

After hitting a fresh 19-month high at the end of last
week, the market has struggled to gain further ground. The S&P
500 lost 2.5 percent this week, thanks largely to a drop of
more than 2 percent after Greece’s credit rating was
downgraded to “junk” status.

But the dip is small, compared with the 75.4 percent gain
in the S&P 500 from its 12 1/2-year closing low in March
2009.

GRECIAN FORMULA

Markets could see some relief at the beginning of the week
if a deal for a Greek bailout is reached. Talks to secure a
multibillion-euro aid package for Athens edged toward a deal
on Friday with negotiations expected to wrap up by Saturday.

It will remain to be seen whether the aid will be enough
to pull Greece out of its debt crisis and prevent it from
spreading to other euro nations, such as Spain and Portugal.

Worries about potential criminal charges for Goldman Sachs
will dog Wall Street after news that federal prosecutors in
New York have begun investigating the company.

The reported criminal investigation follows civil fraud
charges filed about two weeks ago by the U.S. Securities and
Exchange Commission.

“The Goldman Sachs news is one of great interest to
investors because it reflects on the level of risk that must
be put into the market and the financial stocks,” said Chad
Morganlander, portfolio manager at Stifel, Nicolaus & Co in
Florham Park, New Jersey.

Goldman has lost more than $20 billion of its market value
since the SEC charges were filed.

What happens with Goldman also has the potential to up the
ante in favor of financial reform. Senate debate on the reform
bill began on Thursday and is expected to continue for the
next two weeks or more, followed by a vote next month.

GET A JOB

A week of top-tier economic data could provide further
evidence the economy is stabilizing. The non-farm payrolls
report on Friday is expected to show the economy added 200,000
jobs — up from 162,000 in March, according to Reuters data.
The increase in March was only the third since the economy
fell into recession in late 2007.

The U.S. unemployment rate, however, is forecast to hold
steady in April at 9.7 percent, matching its level in March.

A private-sector employment report from payroll processor
ADP on Wednesday — looked at as a precursor to the U.S. Labor
Department’s monthly payrolls report — is expected to show an
addition of 30,000 jobs in April, compared with a loss of
23,000 in March.

Also on the labor front, Thursday’s weekly initial claims
are forecast to fall to 440,000 from 448,000 the week before.

On Monday, the Institute for Supply Management
manufacturing index is expected to rise to 60 in April from
59.6 the month before. The ISM’s reading on the services
sector, due on Wednesday, is forecast to rise to 56 in April
from 55.4 in March.

March pending home sales, due on Tuesday, are expected to
rise 4 percent, compared with a gain of 8.2 percent in
February. March factory orders, also out on Tuesday, are seen
down 0.1 percent after February’s 0.6 percent gain.

BEWARE OF OIL SLICK

Shares of companies connected to the sunken Deepwater
Horizon drilling rig in the Gulf of Mexico could see more
pressure next week as oil continued to flow unchecked from the
undersea wall off Louisiana.

The stock of Halliburton Co (HAL.N: ) lost 12.3 percent this
week, while the U.S.-listed shares of Transocean Ltd
(RIGN.S: )(RIG.N: ) sank 19.4 percent.

“The oil spill unfortunately is not quantifiable at this
moment, and any uncertainty will make investors worry,”
Morganlander said.

Even so, investors have taken solace in the strong
earnings season, helping the S&P 500 end April on the upswing
— its third monthly gain in a row. With 337 of the companies
in the S&P 500 having reported results, 78 percent have beat
analysts’ expectations, according to Thomson Reuters data.

Companies set to release quarterly scorecards next week
include MasterCard (MA.N: ) and CVS Caremark (CVS.N: ). Earnings
also are expected from Loews Corp (L.N: ), which owns Loews
Hotels, as well as major stakes in CNA Financial Corp, one of
the largest U.S.commercial property and casualty insurance
companies, and Diamond Offshore Drilling, one of the world’s
largest offshore drilling companies.

“When all is said and done, in spite of all the negatives,
the market has thus far been quite resilient,” said John
Praveen, chief investment strategist at Prudential
International Investments Advisers LLC in Newark, New Jersey.

Stock Market Trading

(The Wall St Week Ahead column appears every Friday. Comments
or questions on this one can be e-mailed to
[email protected])
(Reporting by Leah Schnurr; Additional reporting by Rodrigo
Campos; Editing by Jan Paschal)

REFILE-Wall St Week Ahead: Stocks face jobs, Greece and Goldman