Investors will not get much in the way of corporate news this week, but Federal Reserve chief Alan Greenspan could sway the market in two appearances as investors search for clues into an interest rate hike expected at month's end.
Financial markets usually pay close attention whenever Greenspan speaks. But his remarks will take on heightened significance this week, ahead of a Fed meeting on June 29-30, during which the central bank is widely expected to lift interest rates from rock-bottom lows.
A surprisingly strong monthly jobs report on Friday bolstered expectations of a rate hike. US employers added a better-than-forecast 248,000 jobs in May, according to a Labour Department report that was the latest sign the improving economy will likely usher in higher interest rates.
"Greenspan speaking this week will be important," said Bill Strazzullo, chief market strategist at State Street Global Markets in Boston.
"What's the Fed's timetable on tightening? We know it's going to happen but how much, and will we see tightening sooner or later? That's going to be the highlight of the week," Strazzullo said.
On Tuesday, Greenspan will speak to a central bank panel before the International Monetary Conference in London. On Thursday, he will testify before the Senate Banking Committee hearing on his nomination to a fifth term as Federal Reserve chairman.
Strazzullo predicts stocks will trade within a tight range as worries of higher rates offset recently strong economic data.
Wall Street's top economists unanimously agree the Fed will start raising interest rates at the June meeting.
Stocks ended higher on Friday. The Dow Jones industrial average rose 46.91 points, or 0.46 percent, to 10,242.82, while the broader Standard & Poor's 500 Index gained 5.87 points, or 0.53 percent, to 1,122.51. The Nasdaq Composite Index added 18.36 points, or 0.94 percent, to. 1,978.62.
For the week, both the blue chip Dow and S&P 500 ended up slightly, their second straight week of gains, but the technology-laden Nasdaq fell.
In addition to Greenspan, headlines from overseas will also dictate the stock market's moves.
Turmoil in Iraq and tension in Saudi Arabia, where recent attacks on Western oil interests have helped fuel a spike in oil prices, will influence investing sentiment, analysts said.
"The Opec meeting just assured people that they weren't going to cut production. I don't think oil goes much lower than it has (around $39 level), but it seems to have taken the edge off the market, which is important," said Fred Dickson, chief market strategist at Portland brokerage D.A. Davidson & Co.
Wall Street will also focus on a smattering of economic data, including on Friday the Labour Department's producer price index, a measure of prices paid to farms, factories and refineries.
Economists forecast a 0.5 percent rise in May's PPI a gain of 0.7 percent in April, which was the biggest increase since March 2003. But the core PPI, which strips out volatile food and energy prices, is forecast to advance just 0.2 percent, in line with April's gain.
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