Investors will not get much in the way of corporate news this week, but Federal Reserve chief Alan Greenspan could sway the market in two appearances as investors search for clues into an interest rate hike expected at month's end.
Financial markets usually pay close attention whenever Mr Greenspan speaks. But his remarks will take on heightened significance next week, ahead of a Fed meeting on June 29-30, during which the central bank is widely expected to lift interest rates from rock-bottom lows.
A surprisingly strong monthly jobs report last week bolstered expectations of a rate hike. US employers added a better-than-forecast 248,000 jobs in May, according to a Labour Department report that was the latest sign the improving economy will likely usher in higher interest rates.
"Greenspan speaking next week will be important," said Bill Strazzullo, chief market strategist at State Street Global Markets in Boston.
"What's the Fed's timetable on tightening? We know it's going to happen but how much, and will we see tightening sooner or later? That's going to be the highlight of the week," Mr Strazzullo said.
Tomorrow, Mr Greenspan will speak to a central bank panel before the International Monetary Conference in London. On Thursday, he will testify before the Senate Banking Committee hearing on his nomination to a fifth term as Federal Reserve chairman.
Mr Strazzullo predicts stocks will trade within a tight range as worries of higher rates offset recently strong economic data.
Wall Street's top economists unanimously agree the Fed will start raising interest rates at the June meeting.
A Reuters survey taken on Friday after the May payrolls report showed all 22 primary dealers expect the Fed to lift its federal funds rate to 1.25 per cent from 1.0 per cent at the end of its June meeting.
Stocks ended higher on Friday. The Dow Jones industrial average rose 46.91 points, or 0.46 per cent, to 10,242.82, while the broader Standard & Poor's 500 Index gained 5.87 points, or 0.53 per cent, to 1,122.51. The Nasdaq Composite Index added 18.36 points, or 0.94 per cent, to. 1,978.62.
For the week, both the blue-chip Dow and S&P 500 ended up slightly, their second straight week of gains, but the technology-laden Nasdaq fell. In addition to Mr Greenspan, headlines from overseas will also dictate the stock market's moves.
Turmoil in Iraq and tension in Saudi Arabia, where recent attacks on Western oil interests have helped fuel a spike in oil prices, will influence investing sentiment, analysts said.
"Saudi Arabia is like a boiling pot where you can't see the steam come out, and one day it's going to explode," said A.C. Moore, chief investment strategist at Dunvegan Associates in Santa Barbara, California.
"People will be bracing for more attacks like we saw last weekend," Moore added, referring to the incident in Saudi Arabia in which suspected al Qaeda militants killed 22 people, mainly Westerners and Asians, linked to the oil industry. The attacks triggered a jump in crude prices.
Still, most analysts forecast the impact of oil on stocks will be limited as crude prices are expected to stabilise.
The Organisation of Petroleum Exporting Countries agreed last week to raise output quotas.
"The Opec meeting just assured people that they weren't going to cut production. I don't think oil goes much lower than it has (around $39 level), but it seems to have taken the edge off the market, which is important," said Fred Dickson, chief market strategist at Portland brokerage D.A. Davidson & Co.
Wall Street will also focus on a smattering of economic data, including on Friday the Labour Department's producer price index, a measure of prices paid to farms, factories and refineries.