US stocks are on their best ride of the year, but with scant earnings or economic data to drive the market this week, the rally's future is at the mercy of volatile oil prices and a few choice words from the Fed. Major stock indexes climbed last week. The Dow Jones industrial average and the Standard & Poor's 500 index posted their best gains since the re-election of President George W. Bush last November. The surge came as the price of oil dropped below $47 a barrel for the first time since February. Oil futures prices fell after the government reported a sharp rise in US crude inventories, and a pair of government reports eased fears about inflation.
Investors will comb through the minutes of the Federal Open Markets Committee's May 3 meeting for an indication of how long the Fed will continue to raise interest rates. The Federal Reserve is expected to release those minutes on Tuesday.
As the corporate earnings season comes to an end, only a handful of big names are on deck with quarterly scorecards this week. Among them are Campbell Soup Co, Medtronic Inc and Computer Associates International Inc.
With so few companies reporting, analysts said that oil prices will stay on investors' radar screens.
If crude prices remain under $50 a barrel, stocks could keep or extend their recent gains, investment strategists said, while a pickup in energy prices could raise concerns about future profitability.
Oil influences corporate profitability through the cost of everything from shipping to plastics. The runup in gasoline and heating oil prices also has eaten into consumers' disposable income.
US crude oil for June delivery settled on Friday at $46.80, down 12 cents. The June crude contract expired at the close of trading on the New York Mercantile Exchange.
On Friday, the blue-chip Dow Jones industrial average finished at 10,471.91, up 331.79 points during the week for a gain of 3.27 percent. The broader Standard & Poor's 500 Index closed at 1,189.28, reflecting a weekly gain of 35.23 points or 3.05 percent. The tech-driven Nasdaq Composite Index ended at 2,046.42, up 69.64 points, or 3.52 percent for the week.
Several transactions helped drive markets over the past week, including a planned acquisition led by America West Holdings Corp of bankrupt US Airways Group Inc and a deal led by private equity firm Ripplewood Holdings LLC in which appliance maker Maytag Corp agreed to be taken private.
US economic indicators set for the week ahead include durable goods orders and new home sales, both from the Commerce Department on Wednesday. Durable goods sales are seen up 1 percent in April, according to a Reuters poll of economists, following a 2.8 percent decline in March. New home sales are seen declining to a seasonally adjusted annual rate of 1.350 million units in April from 1.431 million in March.
On Thursday, Commerce is expected to release preliminary numbers showing real gross domestic product grew at an annual rate of 3.6 percent in the first quarter. This report follows the Commerce Department's advance look at first-quarter GDP on April 28, when it reported a rise of 3.1 percent.
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