Rally might mean withdrawal for stocks

The sign of the New York Stock Exchange is visible on a door on June 23, 2009.

Credit: Reuters/Eric ThayerBy Chuck Mikolajczak

NEW YORK | Fri July 1, 2011 10: 00 pm EDT

NEW YORK (Reuters) - a withdrawal could be on the table the week next to stocks after their best weekly performance in two years, especially if a raft of data made by the June jobs report would strengthen the argument of a strengthening economy.

Stocks rose for five consecutive days as the fog of the Greek debt crisis appeared for once of a lifting economic figures while better provided for, as Friday manufacturing data gave weight to the belief the US economy began to recover from a soft patch.

"What we are looking for a market that will focus on the economic numbers," said Peter Cardillo, Chief Economist of Avalon partners in New York City market.

"We had good real gains towards the end of the quarter so it would not surprise me to see a bit of profit to take out us these figures in the week."

Scheduled for next week includes may factory orders, ISM services and several indicators on the labour market, including the Friday report index.

"It is a little early to declare victory on the mid-cycle slowdown, we have had," said Tim Ghriskey, investment officer head of Solaris Asset Management in Bedford Hills, New York.

"On Friday, you pay, the rate of unemployment - big Kahuna - and that there could be some trepidation goes to it, especially with the market having already rebounded sharply here on several days.".

Even with the economic data on the role of the next week, volume should remain because of the feast of the market on 4 July, which could aggravate the fluctuations of the market.

Other than the extra spike in volume caused by the final reconstruction of Russell Investments by its index on 24 June, average weekly volume was among the lowest of the year for several weeks.

THE BUDGET DEFICIT AND THE BULLS

The volume of light could prove to be an advantage for the bulls, however, especially after the & S P 500 successfully bounced off the coast of the moving average of 200 days, a level of support key technical and jumped on the mobile average of 50 days, that represents a point of resistance.

"State of mind is an opportunistic trade" risks on "and give a lift to the market despite the fact that most people are scraping head." But it is what happens, particularly when it is very light volume, momentum dictates the trend and this is what we find in, "said Peter Kenny, Director-General to the Capital of chevalier in Jersey City, New Jersey.

For the week, the Dow Jones industrial average increased by 5.4%, the S & P 500 gained 5.6% and the Nasdaq Composite Index rose to 6.2% - marking their biggest weekly gains of percentage since July 2009.

With the Greece and the debt crisis European once more pushed the pilot light in the minds of investors, the emphasis has shifted to maturity approach quickly for Congress to reach an agreement on the debt limit, with a further headwind for the stocks.

US Treasury maintained Friday the pressure on the Congress to reach an agreement to raise the debt ceiling and to prevent a default, repeating that he would be legal to borrow August 2 room.

"The big thing on the horizon is now to U.S. deficit problems," said Rick Meckler, President of LibertyView Capital Management, in New York.

"The Greek situation (debt) was aperitif for that, and I think you will see a lot of back and forth as people wonder how steep will be played with the budget deficit."

An another overhang may be evident in the pre-announcement of the profits of the companies before the start of season for earnings with pay Alcoa Inc., July 11. The economic slowdown in the second quarter can lead to some disappointing Outlook.

"We had a soft patch in the economy here rising prices, a little weak on manufacturing, due to the Japan, in Europe, China and various things." What can impact really Q2 earnings and we can see some negative letters, and that could really have a wider impact on the overall market, "said Ghriskey.

(Reporting by Chuck Mikolajczak;) Other reports by Edward Krudy; (Editing by Jan Paschal)