NEW YORK (CNNMoney.com) -- Investors will brace for a spate of economic reports this week with their fingers crossed that there is more good news than bad since that will set the tone for the remaining seven weeks of the year.

With Black Friday less than two weeks away, retailers are hoping consumers will be willing to open their wallets during the all-important holiday sales period, helping fuel the economic recovery.

Kicking off the week will be the government's monthly retail sales report, which investors hope will shed light on how much consumers will be willing to spend.

"Next week is all about consumer spending and the holiday," said Burt White, chief investment officer at LPL Financial.

Retail sales have shown some improvement recently, suggesting that consumers are suffering from "frugal fatigue" and may be more willing to splurge this holiday season, White said.

A rebound in consumer spending, which accounts for the bulk of U.S. economic activity, could help fuel bets that a recovery is firmly underway.

The outlook for consumer spending remains murky with the national unemployment rate at a 26-year high of 10.2%.

"In this environment, anything associated with jobs is probably the most important thing," said Quincy Krosby, market strategist at Prudential Financial.

To that end, investors will likely pay close attention to Thursday's report on the number of Americans filing first-time claims for state unemployment benefits.

Investors will also focus on the plight of the U.S. dollar, which wallowed near a 15-month low against the euro for most of last week.

The dollar has been taking a beating recently as investors take advantage of rock-bottom interest rates in the United States to bulk up on more risky assets.

"For now, it's still sell the dollar and buy risk," White said. "It's a crowded trade, but a good one."

Stocks ended the week on a high note, logging the second consecutive week of gains as optimism about the recovery gained momentum. The question on investors' minds this week will be 'can that momentum be sustained?'

Demand for riskier assets, like equities, could hit a speed bump Monday afternoon with Federal Reserve chairman Ben Bernanke scheduled to deliver an economic outlook speech at the Economic Club of New York.

While the central bank is not responsible for managing currency fluctuations, some analysts think Bernanke may strike a more hawkish tone given the severity of the greenback's recent weakness.

Others expect Bernanke to echo recent official policy statements that interest rates will remain "exceptionally low" for an "extended period" of time.

Monday: The week starts with a closely watched report on October retail sales before the opening bell.

Economists expect the Commerce Department to report that sales rose 0.9% last month after 1.5% drop, according to consensus estimates gathered by Briefing.com.

Also due Monday morning, a report on manufacturing activity in the mid-Atlantic region and business inventory data from September.

Federal Reserve chairman Ben Bernanke will speak about the outlook for the U.S. economy in New York at midday.

Tuesday: The government's producer price index comes out before the market opens. Analysts think prices at the wholesale level ticked up 0.5% in October. Excluding volatile energy prices, the index is forecast to rise 0.1%.

Government figures on capacity utilization and industrial production in October are due out at 9:15 a.m. ET.

The market will also digest quarterly financial results from Home Depot (HD, Fortune 500), Target (TGT, Fortune 500) and TJX Companies (TJX, Fortune 500) before the opening bell.

Wednesday: The housing market will be in focus with reports on housing starts and building permits released before the market opens.

Also before the opening bell, the government's closely-watched inflation gauge is expected to show that consumer prices were flat in October. Excluding food and energy, prices are expected to have risen 0.1% last month after a 0.2% increase the month before.

Thursday: The Labor Department reports on the number of Americans filing new claims for unemployment benefits at 8:30 a.m. ET.

Jobless claims fell to 502,000 filings last week and analysts say a figure below 500,000 this week could help push the market higher.

A report on leading economic indicators comes out after the market opens.

Sears Holdings (SHLD, Fortune 500) will report quarterly earnings in the morning, while PC giant HP (HPQ, Fortune 500) and apparel-maker Gap (GAP, Fortune 500) will post earnings after the closing bell.

Friday: No economic reports are on the docket. 

The pullback after a day of choppy trade showed investors were cautious after a Monday jump that pushed the blue-chip Dow to its highest level in 13 months.

After reversing several times, the Dow Jones industrial average (INDU) closed up 20 points, or 0.2%, to close at 10,246.97.

The S&P 500 (SPX) slipped less than 1 point, or less than 0.1%, to end at 1,093.01, and the Nasdaq composite (COMP) fell 3 points, or 0.1%, to settle at 2,151.08.

David Babbs, head of trading at MF Global in London, said the lack of news this week means the market is "going to go sideways and wait for its next cue."

The market will likely remain in a tight band until the next Federal Reserve policy-setting meeting Dec. 16, said Don Humphreys, president of Voyager Wealth Management.

"After a rally like Monday's, there's always a chance for a pullback, but I think we'll tread water," Humphreys said. "Overall, the trend continues to be higher."

Tuesday could not sustain momentum from the rally Monday, which came after the Group of 20 said over the weekend that it would keep economic stimulus in place.

"We see that stimulus is still needed," said Peter Cardillo, chief market economist at Avalon Partners. "And as long as money is cheap, people will continue to invest."

A falling dollar boosted prices for gold, oil and other commodities, and Cardillo said investors will focus on those markets in absence of major reports -- as well as corporate news including earnings from Applied Materials (AMAT, Fortune 500), Wal-Mart (WMT, Fortune 500) and Walt Disney (DIS, Fortune 500).

Long-term focus. The Dow has soared 56% after hitting a 12-year low in March, and the blue-chip index is up 16.5% for all of 2009. The Nasdaq has jumped 36.6% this year.

Monday's rally was the Dow's third gain of more than 199 points in the past eight trading days. But despite roaring back from its March nadir the Dow is still 28% below the record high set in October 2007.

Analysts and investors alike have struggled to determine whether the recent rally is justified. Voyager Wealth's Humphreys says it depends on the timeline.

"Maybe the fundamentals aren't there for a quick kill, but that's a short-term basis," Humphreys said. "I think for longer-term investors, the fundamentals are there -- we are out of the worst of this recession."

Barring a change in federal interest rate policy, Humphreys said he expects a "flat to higher trend" in the market for the remainder of 2009 with the Dow ending the year above 10,000.

Economy: Most U.S. cities saw gains in the median price of single-family homes sold last quarter, said a report from the National Association of Realtors. The national median home price was $177,900 in the third quarter, up $7,000 from the previous quarter.

In other housing news, the Treasury Department said 650,000 troubled borrowers have been put into trial loan modifications under the Obama administration's foreclosure rescue plan.

Companies: Sprint Nextel (S, Fortune 500) said Monday that it plans to cut between 2,000 and 2,500 jobs in an attempt to reduce costs.

The European Commission has objected to Oracle's (ORCL, Fortune 500) proposed takeover of Sun Microsystems (JAVA, Fortune 500), which could threaten the deal.

Other markets: Global markets were mixed. Asian shares finished the session in positive territory, and European stocks ended slightly lower.

The dollar rose off 15-month lows, jumping slightly against the euro and the British pound. The greenback inched up on the Japanese yen.

The price of U.S. crude oil fell 38 cents to settle at $79.05 a barrel.

Treasurys were steady Tuesday, after a record $25 billion offering of 10-year notes attracted strong demand. The 10-year yield fell to 3.47% from 3.48% late Monday.

The government is selling $81 billion worth of debt this week in a quarterly refunding. Treasury will auction $16 billion in 30-year bonds later in the week.

Market breadth was negative. On the New York Stock Exchange, losers topped winners by three to two on volume of 900 million shares. On the Nasdaq, decliners topped advancers almost nine to four on volume of 1.9 billion shares. 

The Dow Jones industrial average (INDU) soared 204 points, or 2%, to close at 10,226.94 -- its highest level since Oct. 3, 2008.

The gains were broad-based, with all but 1 of the 30 components in the blue-chip index closing higher. Financial and commodity-related shares led the advance.

The S&P 500 (SPX) gained 24 points, or 2.2%, to settle at 1,093.07 and the Nasdaq composite (COMP) rose 42 points, or 2%, to close at 2,154.06.

Stocks rallied right out of the gate Monday after the Group of 20 said over the weekend that it would keep economic stimulus in place.

With little news on tap for this week, "psychological factors and technical levels are driving 70%-80% of this market," said Financial Enhancement Group analyst Joe Clark.

"The market does create its own psychology," he added. "You would never go to the grocery store and pay a higher price because someone else did, but that's what happens in stocks -- the momentum that's happening today after G-20."

Finance ministers of the G-20 met over the weekend and pledged to continue government aid. The dollar fell sharply against the euro and British pound, while commodities and commodity-linked stocks rose.

In "a bit of a dead week" in terms of economic reports, investors will take their cues from other news events, Clark said.

"People are reading the news and pondering all of it," Clark said. "Some stories might be enough for a quick boost, but as far as overall recovery most people are saying, 'We'll believe it when we see it.'"

Oil, gold and the dollar. U.S. oil for December delivery rose $2 to settle at $79.43 a barrel, after sinking almost 3% on Friday's mostly negative labor market report.

COMEX gold for December delivery rose to an intraday record of $1,109.90 Monday before it pared gains to settle up $5.70 at $1,101.40 per ounce.

"The story's all about gold and the dollar," said Charles Smith, chief investment officer at Fort Pitt Capital Group.

With the dollar back at $1.50 against the euro for the first time in a few weeks, "the dollar scare has started again, with people piling into gold," Smith said. "I don't believe inflation is a valid concern, but that's what's moving investors."

Stocks had bounced back last week, with the Dow reclaiming the 10,000 mark. So far in 2009, the Dow is up about 15% and the Nasdaq composite has soared 35%.

S&P and technical trading. Financial Enhancement analyst Clark said more investors have "moved into the technical trading world."

Clark said professional investors had been holding out for the S&P 500 to cross 1,060, viewing the level as a signal it was safe to re-enter the market.

Still others are holding out for when the S&P crosses 1,100 and remains steady above that mark, he said.

"There are people on the sideline viewing this as an opportunity to get in," Clark said. "Personally, I'll be be happy when I see the S&P holding above 1,100 -- even though it's psychological rather than technical."

Eyeing corporate deals. With no significant economic indicators on Monday's docket, investors focused on corporate news, particularly talk about deals -- possible and completed.

Kraft (KFT, Fortune 500) launched a $16.3 billion hostile takeover bid Monday for British candymaker Cadbury after the deadline for the initial bid passed without a deal. Cadbury rejected Kraft's initial $16.7 billion offer in early September and again turned it down.

Comcast (CMCSA, Fortune 500) and GE (GE, Fortune 500) have reportedly agreed on the worth of NBC Universal. The agreement is a major hurdle cleared for Comcast as it aims to gain control of NBC Universal.

Northrop Grumman (NOC, Fortune 500) has sold its consulting arm to two private equity firms. The $1.65 billion deal was announced Sunday.

"Most of these deals have been viewed as positive for the market," said Paul Radeke, wealth advisor at KDV Wealth Management. "It's a view of consolidating domestic opportunity, rather than the transfer of American wealth to the international market."

World markets and bonds: Asian shares closed higher, with Japan's Nikkei adding a modest 0.2% and the Hang Seng in Hong Kong jumping 1.7%.

Major European indexes closed almost 2% higher, with the German DAX leading the way at a 2.4% gain.

Bond prices were mostly lower, with the 10-year note holding modest gains, as the government began selling $81 billion worth of debt this week in a quarterly refunding.

Treasury auctioned $40 billion in 3-year notes Monday, with $25 billion in 10-year notes and $16 billion in 30-year bonds being offered later in the week.

Market breadth was positive. On the New York Stock Exchange, winners topped losers by five to one on volume of 909 million shares. On the Nasdaq, advancers topped decliners almost two to one on volume of 1.2 billion shares.  

NEW YORK (CNNMoney.com) -- So was that it? Is the so-called market correction over?

Stocks rallied last week, with the Dow reclaiming 10,000, as the major indexes erased most of the losses of the previous two weeks. With the week ahead light on economic and corporate news, market direction will be fueled mostly by momentum and emotion.

"For a while, it looked like we were having a buyer's strike, but then the buyers came swooping back in at the end of the week," said Timothy Ghriskey, chief investment officer at Solaris Asset Management.

After rallying 63% from its 12-year low hit in March, the S&P 500 shed nearly 6% in the last two weeks of October. Some feared the pullback would extend to 15%. Instead, buyers jumped back in.

"The looming issue is whether we've seen enough of a correction to bring out even more buyers or whether we need to see a bigger leg down first," Ghriskey said.

A combination of trillions still sitting in money market funds in either cash or low-yielding cash equivalents makes the case for another run up. Slowly improving economic and corporate news should help as well. But as Friday's labor market report made clear, the economic recovering is still in its infancy.

Jobs and the consumer: Last week's run was fueled by better-than-expected profit and economic reports, the government's decision to extend unemployment benefits and the homebuyer tax credit -- and news that Warren Buffett's Berkshire Hathaway (BRKA, Fortune 500) bought railroad Burlington Northern Santa Fe (BNI, Fortune 500).

But even bad or mixed news on the jobs front got rewarded last week, most notably on Friday, when stocks managed to gain despite a government report showing unemployment hit a 26-year high of 10.2% last month.

The knowledge that the labor market is the last area to turn in a recovery and that the unemployment rate would eventually top 10% may have taken the sting out of the report, Ghriskey said. Or there may be the perception that the 10.2% rate was as bad as its going to get.

Either way, the willingness of investors to respond to both good and bad news by jumping in and buying suggests the mood has turned more positive again -- whether it should or shouldn't.

Wall Street saw its biggest one-day rally in three months after the weekly jobless claims dropped to 512,000, a level not seen since January. Yet, the decline could mean people are running out of benefits, rather than finding jobs. And unemployed or underemployed consumers don't spend aggressively -- problematic for a recovery.

"At some point soon we need to start seeing improvement rather than just better-than-expected news," said Mike Stanfield, chief investment officer at VSR Financial Services.

"Even if the news continues to improve it's reasonable that stocks will seesaw for the next few months until the economic news starts to show stronger growth," he said.

Monday: This week brings the quarterly refunding from the Treasury Department. Treasury issues $40 billion in 3-year notes Monday, $25 billion in ten-year notes Tuesday and $16 billion in 30-year bonds Thursday.

Tuesday: The Senate Budget Committee holds a hearing on bi-partisan efforts needed to cut the deficit.

Bank of America's financial services conference begins in the morning, with outgoing CEO Ken Lewis due to speak.

Wednesday: Treasury bond markets, government offices and some banks are closed for Veterans Day, but all other financial markets are open.

After the close of trading, Applied Materials (AMAT, Fortune 500) reports quarterly results. The chip gear maker is expected to have earned 11 cents per share versus 55 cents a year ago, according to analysts surveyed by Thomson Reuters.

Thursday: Wal-Mart Stores (WMT, Fortune 500) reports results before the start of trading. The Dow component is expected to have earned 81 cents per share versus 77 cents a year ago, according to forecasts.

Walt Disney (DIS, Fortune 500) reports quarterly earnings after the close. The media company is expected to have earned 40 cents per share versus 43 cents a year ago.

Government readings on weekly jobless claims, weekly crude oil inventories and the October Treasury budget are also due in the morning, but forecasts weren't available in advance.

Friday: The September trade balance is due out before start of trading. The trade gap is expected to have widened to $31.9 billion from $30.7 billion in the previous month, according to a consensus of economists surveyed by Briefing.com.

The University of Michigan's consumer sentiment index for November is expected to have risen to 71.8 from 70.6 in the previous month.

JC Penney (JCP, Fortune 500) is due to report results before the start of trading. The retailer is expected to have earned 11 cents per share versus 55 cents a year ago.

Abercrombie & Fitch (ANF) reports results before the start of trading. The retailer is expected to have earned 21 cents per share versus 72 cents a year earlier.

Government readings on October import and export prices are also due in the morning, but forecasts were not available in advance. 

The Dow Jones industrial average (INDU) gained 205 points, or 2.1%, closing at 10,005.96. The Nasdaq composite (COMP) climbed nearly 50 points, or 2.4%.

Both the Dow and Nasdaq saw the biggest one-day percentage gains since July 23.

The S&P 500 (SPX) gained 20 points, or 1.9%.

"Today's big news was that we saw fewer claims for unemployment benefits," said Mike Stanfield, chief investment officer at VSR Financial Services. "That suggests that the underlying economics are continuing to improve."

He said that this was reassuring to investors following several weeks of concerns about the pace of the recovery. It was also encouraging for investors ahead of Friday's monthly employment report.

Stocks have been volatile over the past three weeks, with the S&P 500 losing 5% through Wednesday's close on worries that the rally has gotten ahead of the recovery. Between March 9 and the peak on Oct. 19, the S&P 500 gained 63%.

Stocks ended mixed on Wednesday after the Federal Reserve held interest rates steady at historic lows near zero -- and said it will keep them low for an extended period.

The issue for markets is whether there have been enough positive developments of late to give stocks another leg up, Stanfield said. He said he thinks that the next leg up could be delayed, and that stocks are likely to churn in a range for the next six months or so. After that point, investors will have a better sense of how the economy is doing without the benefit of trillions of dollars in government stimulus, which many credit for the 3.5% rise in GDP in the third quarter.

Gains were broad based, with all 30 Dow issues rising, led by Boeing (BA, Fortune 500), Caterpillar (CAT, Fortune 500), Chevron (CVX, Fortune 500), Exxon Mobil (XOM, Fortune 500), IBM (IBM, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Procter & Gamble (PG, Fortune 500), 3M (MMM, Fortune 500), United Technologies (UTX, Fortune 500) and Wal-Mart Stores (WMT, Fortune 500).

Market breadth was positive. On the New York Stock Exchange, winners beat losers four to one on volume of 1.3 billion shares. On the Nasdaq, advancers topped decliners by over three to one on volume of 2.25 billion shares.

Jobs: The government's weekly jobless claims report and third-quarter productivity report showed that the pace of layoffs is slowing, but also that employers are still not creating jobs.

The number of Americans filing new claims for unemployment fell to 512,000 last week from 532,000 the previous week, the lowest level since January. Economists surveyed by Briefing.com expected 522,000 claims, on average.

Continuing claims, a measure of Americans who have been receiving benefits for a week or more, fell to 5.749 million from 5.817 million the week before. Economists thought it would fall to 5.750 million. It was the eighth decline in nine weeks. Although the decline could mean people are running out of benefits -- not that they are finding jobs.

Separately, the Senate and House both voted Wednesday to extend unemployment benefits by up to 20 weeks -- and extend the homebuyer tax credit. President Obama is expected to sign the bill into law Friday.

Another economic report showed that worker productivity is up, a good sign for corporate profits, but also further evidence that companies aren't hiring. Third-quarter productivity rose by 9.5% after rising 6.6% in the previous quarter. Economists thought it would fall to 6.5%.

"The productivity and jobless claims show a rapidly improving economy," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.

But the key report this week is the October unemployment report from the Labor Department, due Friday, Detrick said.

Due before the start of trading, employers are expected to have cut 175,000 jobs from their payrolls after eliminating 263,000 in the prior month. The unemployment rate, generated by a separate survey, is expected to rise to 9.9% from 9.8% in September.

Retail: Shoppers remained cautious with their spending last month, with discounters and warehouse clubs seeing the best October retail sales.

On the upside, Costco (COST, Fortune 500) said sales at stores open a year or more rose 5% during the month, topping forecasts for a rise of 4.7%. Shares gained around 1%.

Gap (GPS, Fortune 500) reported sales rose a better-than-expected 4%, sending shares higher in morning trading. Shares gained 3.5%.

On the downside, American Eagle Outfitters (AEO) said sales fell 5% versus forecasts for a rise of 1.7%. Shares fell 11.6% in active New York Stock Exchange trading.

Company news: After the close Wednesday, Cisco Systems (CSCO, Fortune 500) reported weaker quarterly earnings and revenue that beat estimates.

The company's CEO, John Chambers, said current-quarter revenue would top estimates and that business conditions had bottomed at least six months ago. Cisco shares gained 2.8% Thursday.

Automaker Toyota (TM) reported a surprise quarterly profit Thursday and cut its annual loss forecast by over 50%

Shares of CVS Caremark (CVS, Fortune 500) slumped 21% in active trading after the company warned that 2010 profits at Caremark, its pharmacy benefits management division, are likely to slump by 10% to 12%. The company also said Caremark's CEO is stepping down. Drugstore CVS bought Caremark in March 2007

The news overshadowed the company's bigger-than-expected jump in quarterly profit.

World markets: European markets gained, reversing early losses. Asian markets tumbled.

Currency and commodities: The dollar fell versus the euro and gained against the yen.

U.S. light crude oil for December delivery fell 62 cents to settle at $79.78 a barrel on the New York Mercantile Exchange.

COMEX gold for December delivery climbed $2 to settle at $1,089.30 an ounce.

Bonds: Treasury prices fell, raising the yield on the 10-year note to 3.53% from 3.52% Wednesday. Treasury prices and yields move in opposite directions.