NEW YORK With Friday's payrolls report serving as a springboard to lift Wall Street stock indexes to fresh all-time highs, investors are left to contemplate whether the gains will fizzle or if the upward momentum will continue.
Investors cheered the jobs report on Friday, which showed employment rose at a faster than anticipated pace an April and hiring in the prior two months was much stronger than previously thought.
The report eased investor concerns after a raft of soft data, particularly in the manufacturing sector, and sent the S&P 500 hurtling past what was viewed as its final resistance level of 1,600 to a fresh all-time closing high of 1,614.42.
With little in the way of economic data on tap next week and earnings season moving into the home stretch, there appears to be little that could derail a move higher.
"That's the $64,000 question - without a micro or macro focus, what do we shift our attention to?" said Art Hogan, managing director of Lazard Capital Markets in New York.
"I would argue in a lack of critical information this market has found a path of least resistance to the upside."
The economic calendar for next week is extremely light, with consumer credit and wholesale inventories for March among the few notables.
Earnings season continues its wind down, with Walt Disney Co (DIS.N) the only Dow component scheduled to report for the week. Its results could also provide a glimpse into the health of consumer spending.
Other notable S&P 500 companies expected to post earnings include Tyson Foods Inc (TSN.N), Dean Foods Co (DF.N), Electronic Arts Inc (EA.O), Whole Foods Market (WFM.O), Nvidia Corp (NVDA.O) and Priceline.com (PCLN.O).
Corporate earnings have improved from earlier market expectations, with the expected earnings growth now at 5.2 percent, up from 1.5 percent at the start of earnings season.
According to Thomson Reuters data through Friday, of the 404 companies in the benchmark 500 index that have reported earnings, 68.3 percent have topped analyst expectations, above the 63 percent average since 1994 and the 67 percent average for the past four quarters.
But revenue remains disappointing, with only 46.3 percent of S&P 500 companies topping Wall Street expectations, well below the 62 percent beat rate since 2002 and shy of the 52 percent average for the past four quarters.
With the S&P easily breezing past what was seen as its final resistance point of 1,600, the index is now in uncharted waters for investors to try and predict when a pullback may occur or gains may slow.
"(The S&P 500) broke through that 1,600 resistance level like it wasn't even there based on the payrolls report," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
"Generally you don't want to fight a 52-week high, you definitely don't want to fight an all-time high."
For the week, the Dow rose 1.8 percent, the S&P 500 gained 2 percent, and the Nasdaq advanced 3 percent.
With the gains on Friday, the S&P 500 put together its first consecutive weekly advances since a seven-week run that ended in mid-March, a possible sign of a further move higher. Markets now head into the traditionally weaker summer months. The index has fallen in May for the past three years.
"The key now is, you want to see the bulls continue to push higher, you don't want to see the slip back," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, Ohio.
"The ultimate contrarian would say a lot of that very well could be priced in, the thing most people aren't expecting is a continued rally in the normally weak summer months.
By the same token, the lofty levels for equities could make them ripe for a pullback, with investors resuming the battle between booking profits and buying dips. That battle caused the index to alternate between weekly gains and losses throughout the latter portion of March and most of April.
"It is a bipolar market. It is either all on or all off," said Mendelsohn. "Either things are great and we are going to the moon, or everything is falling apart and it's all over."
(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)