Stock Market

The coming week may well be a turning point for the stock market and its March rally. After three weeks of gains based on signs that the economy might be turning around, investors will get a batch of reports that could provide more evidence of whether the recession is easing. Among the data: the government's report on how many jobs were lost last month and the Institute for Supply Management's assessment of the health of the manufacturing and service sectors.

It's a simple matter in our capitalist economy to explain why so many people have lost their jobs in recent months: Companies have been desperate to slash costs to protect what's left of their bottom line. When profit is under siege, labor -- most companies' biggest expense -- inevitably takes the hit. As first-quarter earnings reports roll out in the next few weeks, the numbers are expected to be disastrous. Wall Street already knows as much.

Ready to give the stock market a try? Rallies like the sharp upturn the market has had since March 9 tend to give reluctant people the urge to invest in stocks again. But if you are among them, remember there is no clarity yet that this rally is for keeps. Often in bear markets, or long-term losing periods like the one stocks have been in since October 2007, there are rallies that look good for a while, only to be replaced by downturns.

Uncomfortable putting your hard-earned money in stocks -- even after the recent run-up that has helped recover a portion of the last year's losses? That's probably a good sign. "When people as a group are the least comfortable is the best time to invest," said Gerald Appel, president of Signalert Corp., a money management firm in New York and publisher of investment newsletter Systems & Forecasts.

An intense week of earnings reports will tell whether Wall Street can extend its rally to a seventh week -- or see its gains pop like a bubble. With each week that the stock market lifts itself from the 12-year lows seen in early March, investors grow at turns hopeful and nervous. The gains are welcome after torrential selling in February, but too much too soon could fan worries that a rebound will quickly go into reverse.

Nine weeks ago, the stock market couldn't find a single thing to be hopeful about. Now, seemingly nothing can upset it. Chrysler in bankruptcy? No surprise there. Possible global flu pandemic? The authorities will handle it. The economy shrank at a 6.1% annual rate last quarter? Ancient history! Blue-chip stock indexes this week rose for the seventh week of the last eight, with the Dow Jones industrial average adding 44.29 points, or 0.5%, to 8,212.41 on Friday. The Dow is up 25.

Asian stocks fell in trading today, as concerns mounted that North Korea may step up missile tests and investors speculated a report will show the U.S. housing market is still contracting. In Europe on Monday, meanwhile, stocks closed little changed amid ongoing concerns about the sustainability of recent market gains. Germany's DAX index of blue chips closed down 0.3% at 4,918.45, while the French CAC-40 index rose 0.2% to 3,236.16.

Consumers are feeling somewhat better, and that's making investors feel better too. But some market watchers question how long these mutually reinforcing good moods can last. The stock market rose for the first time in a week Tuesday as unexpectedly strong data on consumer confidence sparked optimism that spending by Americans could support a hoped-for economic recovery in the second half of the year. The Dow Jones industrial average jumped nearly 200 points, or 2.

The stock market is looking winded from its three-month race upward. After a quick bounce off 12-year lows in early March, Wall Street is having a harder time carving advances as investors await definitive signs of a break in the recession. The benchmark Standard & Poor's 500 index rose 5.3% in May, but that was less than its 9.4% surge in April. Traders have been buying stocks on kernels of economic data and corporate earnings reports that indicate the economy's slide could be slowing.

At the time, Robert Stock did not consider himself a trailblazer. It has been three years since, at age 16, he decided to skip his senior year at Agoura High to enroll and play baseball at USC -- a move that started a local trend that shows signs of gaining traction elsewhere.