Wall Street knows it shouldn't get ahead of itself.
So traders and investors are likely to go into the new week cautiously as they wait to see if last week's rally was a sign of a turnaround or just a blip.
The market has gotten used to false starts since stocks began their collapse last September. And as Wall Street ran up its biggest weekly gain since November, many analysts warned that this rally would soon fizzle, with stocks pulling back again rather than staging a lasting recovery. Rallies before it have evaporated — most notably the big comeback in late 2008.
Last week's surprising rally came on what looked like the start of something positive. Better-than-expected retail sales figures helped stocks, as did upbeat corporate news. First, there was word that Citigroup Inc. had operated at a profit the first two months of the year. There was also improving news from four other Dow Jones industrials: Bank of America Corp., General Electric Co., General Motors Corp. and Pfizer Inc.
"We have seen a positive change here," said Michael Sheldon, chief market strategist at RDM Financial Group, of the market's sentiment. "It seems like the mentality has changed a little bit."
The coming week has a series of economic reports that aren't expected to show significant improvement. But the market may get another lift if there are more signs that the economy is at least not getting any worse.
Perhaps the greatest possible influence this week will be the Federal Reserve's assessment of the economy that will accompany its decision on interest rates after a two-day meeting that ends Wednesday. The Fed is widely expected to hold interest rates steady. Its federal funds rates is already almost as low as it can go, set at a range of zero to 0.25 percent.
"All the Fed can do at this point is be clear about the role they are playing and say that they are going to do anything it takes to prop up this system," said Tommy Williams, president of Williams Financial Advisors in Shreveport, La.
Last week, the Dow gained 9 percent, rising 597.04 points to 7,223.98. The Standard & Poor's 500 ended up 10.7 percent, rising 73.17 points to 756.55.
"We actually put some money to work this past week on this move to the upside," said Phil Orlando, chief equity market strategist at Federated Investors in New York. "But we're certainly concerned about the potential for some reversal here."
The Citi news, which broke the market's long losing streak was a surprise for many investors, especially the short sellers who had been unloading stocks as they bet that Wall Street was going to keep falling. They were forced to quickly buy stocks back, and contributed heavily to Tuesday's 379-point surge in the Dow.
Technical buying also had a hand as stocks extended their advance to four days — the first such winning streak since the five day gain that ended in late November — but it was also clear that sentiment had, at least for the time being, turned.
"I think the propensity is to assume the (downward) trend is going to continue, but I don't think that's necessarily what's going to happen," said Don Hodges, co-portfolio manager of the midcap grown Hodges Fund in Dallas.
If a recovery is in fact under way, the market may become more of a stock-picker's market. Many stocks are oversold, and market experts say that makes them a good value.
The coming week will bring a flood of data for investors to consider as they try to decide their next moves.
Earnings reports are due from some of nation's big retailers and other companies including Nike Inc., Oracle Corp. and Discover Financial Services.
A Fed report on industrial production for February is due Monday, and the Labor Department delivers two inflation reports: its producer price index for February on Tuesday and the consumer price index on Wednesday. The department releases its latest report on weekly jobless claims comes out Thursday.
The Commerce Department is expected to release its report on housing starts for February on Tuesday. On Wednesday, the department reports on the current account trade deficit for the fourth quarter.
Wall Street has been able to take a lot of negative economic numbers in stride lately, understanding that the recession will take time to work itself through. But, Orlando said, "if any of these reports are less dreadful, we can only hope the market is going to take that positively."