UPDATE 3-Wall St Week Ahead: Eyes on jobs, Greece and Goldman

(Updates with details Times Square car bomb)

By Leah Schnurr

NEW YORK, May 2 (BestGrowthStock) – April’s jobs report and a slew
of other economic indicators may bolster U.S. stocks (Read more about the stock market today. ) this 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 nonfarm payrolls report for April.
The data is expected to show the economy added jobs for a
second month in a row.

But probes into Goldman Sachs (GS.N: ), efforts to alleviate
Greece’s debt crisis, a massive oil spill in the Gulf of Mexico
and a defused car bomb in New York’s Times Square over the
weekend could steal the spotlight and test investors.

“It could be a wild one. I think we’re going to have added
volatility,” 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 new 19-month high at the end of last week,
the market has struggled to gain more ground. The S&P 500 lost
2.5 percent last week, due 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 S&P 500’s climb of
75.4 percent from its 12 1/2-year closing low in March 2009.

GREECE, AGAIN

Markets could take a mixed view of an agreement on Sunday
by European finance ministers for a record 110 billion euro
($147 billion) bailout for debt-stricken Greece after Athens
committed itself to years of painful austerity.
[ID:nLDE6400CL]

“The EU’s political commitment and the promise of a
forthcoming release of funds will stabilize the Greek
situation,” said Lena Komileva, head of G7 market economics at
Tullett Prebon.

But Michael Cheah, a senior portfolio manager with
SunAmerica Asset Management in Jersey City, New Jersey, pointed
out on Sunday that even though the plan helps Greece pay its
debts now, “everyone knows the main problem in Greece is the
shrinking tax base.”

It also remains to be seen whether the aid will prevent the
Greek crisis from spreading to other euro-zone 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 and 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.

“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.

On top of all those risk factors, investors will closely
track an investigation into who attempted to set off a car bomb
in Times Square on Saturday evening. [ID:nN02156259]

While viewed as an attempted terrorist attack, police on
Sunday said there is no evidence to support a Taliban claim of
responsibility.

PAYROLLS ON DECK

A week of top-tier economic data could provide further
evidence the economy is stabilizing. The nonfarm payrolls
report for April, due on Friday, is expected to show the
economy added 200,000 jobs — up from 162,000 in March,
according to economists polled by Reuters. 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.

On Monday, the Institute for Supply Management
manufacturing index is expected to rise to 60 in April from
59.6 the month before. Monday’s economic agenda includes March
data for personal income and spending.

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.

The ISM’s services-sector index, due on Wednesday, is
forecast to rise to 56 in April from 55.4 in March.

BEWARE OF OIL SLICK

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

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.

“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.
(The Wall St Week Ahead column appears every Sunday. Comments
or questions on this one can be e-mailed to:
[email protected])

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(Reporting by Leah Schnurr; Additional reporting by Rodrigo
Campos, Al Yoon in New York, and Nigel Stephenson in London;
Editing by Chris Sanders and Jan Paschal)

UPDATE 3-Wall St Week Ahead: Eyes on jobs, Greece and Goldman