updated 4/1/2007 4:26:47 PM ET 2007-04-01T20:26:47

After a tumultuous first quarter in the stock market, investors this week will be looking at manufacturing data to gauge whether the economy is strong enough to overcome the ailing housing market.

Major Market Indices

On Monday, the Institute for Supply Management releases its March index of the nation’s manufacturing sector. The market is expecting a reading of 51.0, down from 52.3 in February but still indicating growth. A lower figure could cause a selloff, especially given that last week’s Chicago regional manufacturing index came in strong.

Later in the week, the ISM reports on the U.S. service sector on Wednesday. Analysts predict that the March index will come in at 54.7, indicating slightly faster growth than the February reading of 54.3.

This week will also bring key jobs data on Friday. The stock market will be closed for the Good Friday holiday, but investors will be watching.

Analysts predict that March payrolls will rise by 120,000, up from a rise of 97,000 the previous month, but they also anticipate a slight uptick in the unemployment rate to 4.6 percent from 4.5 percent. The market forecasts hourly earnings will rise by 0.3 percent, a bit less than the 0.4 percent rise in February.

The Dow Jones industrials finished the first quarter down 0.87 percent, while the Standard & Poor’s 500 index ended up 0.18 percent and the Nasdaq composite index ended up 0.26 percent. After a huge dip in late February, the major stock indexes could have slipped much further as the subprime mortgage market stumbled, the dollar weakened and as manufacturing slowed. However, stability on the jobs scene provided the stock market with some tread. Investors were assuaged by the belief that if most Americans are still employed, they’re still getting paid — and if they’re still getting paid, they can still spend money.

Other factors that could give stocks a boost are further signs of strong corporate takeover activity, and the belief that first quarter earnings will show modest growth in company profits. But the same obstacles that dogged investors in the first quarter remain, notably high inflation, rising energy prices, a weakening dollar and woes in the subprime mortgage market.

More economic data
St. Louis Fed President William Poole speaks on inflation in New York on Monday.

The major automakers on Tuesday report on their sales for March.

On Wednesday, the Commerce Department reports on factory orders for February. Analysts are forecasting a 2 percent rise, up from a 5.6 percent fall a month earlier.

Also Wednesday, Dallas Fed President Richard Fisher speaks in Austin on economic trends.

The Federal Reserve on Thursday releases its measure of consumer debt for February. It is expected to slip to $5.0 billion from $6.4 billion in January.

Meanwhile Thursday, the Chicago Fed releases its February index on manufacturing in the Midwest. The market predicts a 2.3 percent decline.

And a few earnings reports
The schedule of earnings releases is slim this week; the surge of first-quarter financial reports begins in earnest starting April 16.

On Wednesday, Best Buy Co. reports fiscal fourth-quarter earnings and analysts are forecasting a profit of $1.52 per share. Best Buy closed last Friday at $48.72, in the lower half of its 52-week range of $43.51 to $59.50.

Circuit City Stores Inc. also releases its fiscal fourth-quarter earnings on Wednesday, and analysts are expecting a per-share profit of 63 cents. Circuit City closed last Friday at $18.53, at the low end of its 52-week range of $17.02 to $31.54.

Meanwhile Wednesday, Monsanto Co. reports its fiscal second-quarter earnings, which the market is expecting to show a profit of 94 cents a share. The biotech company closed last Friday at $54.96, the upper end of its 52-week range of $37.91 to $57.08.

On Thursday, Constellation Brands Inc. will release its fiscal fourth-quarter earnings. The wine seller, which is expected to post a profit of 34 cents a share, closed at $21.18, in the lower half of its 52-week range of $18.83 to $29.17.st

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