Stocks to weigh recession odds

By Jennifer Coogan

NEW YORK (Reuters) - U.S. stocks face a blitz of economic indicators this week and may come under pressure if any hint the United States is in recession or headed into one.

The housing market, at the center of the economic slowdown, will get particular attention this week. Monday's existing home sales report will be followed by the S&P/Case-Shiller Home Indexes on Tuesday. New home sales are set for release on Wednesday, the same day luxury home builder Toll Brothers Inc (TOL.N: Quote, Profile, Research, Stock Buzz) reports quarterly results.

Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) is set to release earnings on Thursday. Merrill Lynch cut its stock ratings on Freddie Mac and Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) on Friday to "sell" from "neutral," with analyst Kenneth Bruce writing that the market is not braced for the companies to report "significant losses" on their fourth-quarter results. Fannie Mae and Freddie Mac are the two largest sources of financing for U.S. home loans.

"With housing numbers coming out, it's not a good thing in this market, given that they always seem to disappoint," said Owen Fitzpatrick, head of the U.S. Equity Group at Deutsche Bank Private Wealth Management, in New York. "Data just keeps pointing to the economy slowing. I think the market has to adjust expectations about earnings. They're definitely still too high and need to come down."

The median forecast for U.S. existing home sales in January is an annualized rate of 4.80 million units, down from December's 4.89 million units, according to economists polled by Reuters. The report is due on Monday at 10 a.m. EST.

New home sales are seen at an annualized rate of 600,000 units in January, down from December's 604,000, the Reuters poll said. Data is due on Wednesday at 10 a.m. EST.

Other data on tap include several price indexes and growth indicators, which will help determine whether the Federal Reserve will keep cutting interest rates as it seeks to stimulate the economy. Thursday brings an updated report on fourth-quarter gross domestic product.

February wraps up on Friday with an extra day, since this is a leap year. The economic calendar for February 29 is full, with personal income and spending, the Chicago Purchasing Managers Index and the final reading for February on the Reuters/University of Michigan consumer sentiment index.