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New York. April’s jobs report and a slew of other economic indicators may bolster US stocks this week, but jitters over Greece’s debt and investigations into Goldman Sachs will test the market’s resiliency.

Stocks could get a lift as earnings season rolls along with investors expecting more strong results. Though some big names are already out of the way, three Dow components — Kraft, Cisco and Pfizer — are on tap.

Key economic reports on the manufacturing, housing and services sectors will be released throughout the week, but the main event will be Friday’s non-farm payrolls report for April. The data is expected to show the economy added jobs for a second month in a row, with an increase of 200,000 expected for in April.

Probes into Goldman Sachs, efforts to alleviate Greece’s debt crisis and a massive oil spill in the Gulf of Mexico could steal the spotlight and test stocks’ gains.

“It could be a wild one. I think we’re going to have added volatility,” said Joe Benanti, managing director at Rosenblatt Securities. “Seeing the S&P swing around a bit gets some of the deadwood off the sidelines and you start to figure out what the real basis of this market is — a slow steady gain is still in the cards.”

After hitting a fresh 19-month high at the end of last week, the market has struggled to gain further ground. The S&P 500 lost 2.5 percent this week, thanks largely to a drop of more than 2 percent after Greece’s credit rating was downgraded to junk status.

But the dip is small, compared with the 75.4 percent gain in the S&P 500 from its 12-and-a-half-year closing low in March 2009.

Markets could see some relief at the beginning of the week from the deal to bailout Greece. It will remain to be seen whether the aid will be enough to pull Greece out of its debt crisis and prevent it from spreading.

Worries about potential criminal charges for Goldman Sachs will dog Wall Street after news that federal prosecutors in New York have begun investigating the company.

The criminal investigation follows civil fraud charges filed by the US Securities and Exchange Commission.

“The Goldman Sachs news is one of great interest to investors because it reflects on the level of risk that must be put into the market and the financial stocks,” said Chad Morganlander, a portfolio manager at Stifel, Nicolaus.

Goldman has lost more than $20 billion of its market value since the charges were filed.

What happens with Goldman has the potential to up the ante in favor of financial reform. Senate debate on the reform bill is expected to continue for the next two weeks or more, followed by a vote next month.

A week of top-tier economic data could provide further evidence the economy is stabilizing. The non-farm payrolls report on Friday is expected to show the economy added 200,000 jobs — up from 162,000 in March. The increase in March was only the third since the economy fell into recession in late 2007.

The US unemployment rate, however, is forecast to hold steady in April at 9.7 percent, matching its level in March. A private-sector employment report from payroll processor ADP on Wednesday — looked at as a precursor to the US Labor Department’s monthly payrolls report — is expected to show an addition of 30,000 jobs in April, compared with a loss of 23,000 in March.

Also on the labor front, Thursday’s weekly initial claims are forecast to fall to 440,000 from 448,000 the week before.

Companies set to release quarterly scorecards next week include MasterCard and CVS Caremark. Earnings also are expected from Loews Corporation, which owns Loews Hotels, as well as major stakes in CNA Financial, one of the largest US commercial property and casualty insurance companies, and Diamond Offshore Drilling, one of the world’s largest offshore drilling companies.

“When all is said and done, in spite of all the negatives, the market has thus far been quite resilient,” said John Praveen, chief investment strategist at Prudential International Investments Advisers of New Jersey.

 

Reuters