| SAN FRANCISCO (MarketWatch) -- U.S. stocks are set to extend their rebound from the global sell-off next week on a series of economic reports expected to show steady growth and little inflation, as well as on positive financial updates from companies such as Texas Instruments Inc. and broker Goldman Sachs Group, strategists said.
Figures on closely watched producer and consumer prices, industrial production and retail sales for February will anchor the pile of economic data on its way. Market experts and economists largely expect incremental shifts in key data, which would show that the economy is on track to grow at a sustainable rate and keep the Federal Reserve from finding reasons to raise rates.
"There's going to be recovery ...we had a little bit of a washout in speculation. The big macroeconomic numbers are benign, and I think we'll have strength in the market [in the] short term," said Thomas Winmill, portfolio manager at the Midas Fund (MIDSX).
Leading into the next week's round of data was Friday's in-line jobs report for February. Nonfarm payrolls rose by 97,000; expectations were for an increase of 100,000 jobs. The unemployment rate moved down to 4.5% from 4.6%.
Investors looking for bright spots in the market will look to Texas Instruments (TXN) , which will issue its midquarter update Monday evening.
The world's largest maker of phone chips was upgraded Friday at Stifel Nicolaus to buy from neutral on expectations that orders will improve, as large customers such as Motorola Inc. (MOT) and Nokia Corp. (NOK) whittle down their inventories.
Brokerage firms Goldman Sachs (GS) on Tuesday and Lehman Brothers Holdings Inc. (LEH) on Wednesday will release their quarterly results, as will Bear Stearns Cos. (BSC) on Thursday.
A week after U.S. stocks had their worst weekly performance in the last three years, Wall Street's fragile optimism was piqued by rallies in markets worldwide to leave the benchmark indexes higher for the week.
Investors have been "picking through everything that has been sold off and putting money to work," said Ken Kam, portfolio manager of the Marketocracy Masters 100 Fund.
Kam added that the road to recovery will be lengthy for investors, whose confidence in equities was rocked by the rampant selling that erased $3.1 trillion on the world's markets, according to the Dow Jones Wilshire Global Total Market Index.
"People are quick to panic when it looks like the market is falling through the floor, but it takes more time for that fear to dissipate. You're not going to have a 400-[point] pop and the [sell-off] will just be forgotten."
Data to come
Investors will see the Labor Department's reports on producer and consumer prices in February on Thursday and Friday.
The Fed -- which will hold its rate meeting on March 20 and 21 -- wants to see contained inflation in concert with steady economic demand, according to Barry Ritholtz, chief market strategist at Ritholtz Research & Analytics.
Economists surveyed by MarketWatch expect the core PPI, which excludes prices for energy and food, to remain unchanged at 0.2%. The core CPI is expected to edge down to 0.2% from 0.3%.
Including food and energy, the PPI is expected to show a rise of 0.6% compared with a 0.6% decline in January. The CPI is expected to come in at 0.3% from 0.2%.
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"[The Fed is] really hoping to see a stay exactly in the sweet spot, which is a tough thing to do," said Ritholtz.
The markets will search for signs of recovery in the manufacturing sector in the Fed's industrial production report on Friday. Economists expect an increase of 0.4% compared with January's sharp drop of 0.5%.
The industrial production report will contain figures on capacity utilization, which is expected to tick up to 81.3% from 81.2% in January. Kam said that the utilization numbers are a good gauge of how much slack there is in the economy.
"When you start growing beyond the nation's ability to add capacity, that's inflationary," he added. A reading below the estimate may provide reason for the Fed to ease rates, "but I don't see that in the cards."
Retail sales are also expected move higher, by 0.2% compared with an unchanged reading in January. The report arrives on the heels of dismal February sales results by retailers, who blamed frigid winter weather for their shortfalls. See full story.
Midas Funds' Winmill said that he'll watch for Tuesday's report on the fourth-quarter current account deficit, which measures international flows of goods, services and capital in and out of the United States. The current account deficit is expected to narrow to $204.5 billion from $225.6 billion in the third quarter.
If that projection is met, he reasoned, "that means that things are going right for the dollar. It would be relieved and that would be positive for equities."
He also said that narrowing would signal to him that "U.S. exporters are doing a better job at getting more competitive."
Quarterly results from grocer and S&P 500 Index ($SPX) constituent Kroger Co. (KR) will be delivered Tuesday. Analysts surveyed by Thomson Financial expect 14% growth in both per-share earnings and sales, to 45 cents a share and revenue of $16.8 billion.
Stocks log weekly gains
A volatile trading session on Wall Street Friday ended with the Dow Jones Industrial Average ($INDU) higher by 15 points at 12,276 -- with gains coming early but then slipping, followed by a late-session bounce.
The S&P 500 ticked up 1 point to 1,402, but the Nasdaq Composite Index (COMP) slipped 0.2 points to 2,387. However, the tech-rich index rose 0.8% for the week.
For the week, the Dow rose 1.3%, just a slice of the index's 4.3% tumble last week. The S&P 500 closed up 1.1%.
Treasury prices fell sharply lower, pushing up yields. The yield ($TNX) on the benchmark 10-year note closed at 4.587%, up from 4.51% on Thursday.
Crude-oil futures ended Friday at their lowest level in about three weeks. The contract for April delivery ended the week with a roughly 3% loss ahead of Thursday's meeting of the Organization of the Petroleum Exporting Countries.
Gold futures ended Friday down $3.50 at $652 an ounce, but higher by more than 1% for the week.
The dollar rallied to a one-week high against the yen and rose vs. the euro Friday. For the week, the greenback rose 0.6% against the euro and 1.2% vs. the yen.
Carla Mozee is a reporter for MarketWatch in San Francisco.
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