Wall St Week Ahead: Stocks may stumble on jobs, earnings view

By Kristina Cooke

NEW YORK (Reuters) -Stocks may struggle to make headway next week, with jobs data expected to provide more evidence of recession and more companies likely to revise their guidance as the earnings reporting season approaches.

Investors will also keep a close eye on the credit markets to determine if the Federal Reserve's actions to provide liquidity are taking effect, said John Praveen, chief investment strategist at Prudential International Investments Advisers LLC in Newark, New Jersey.

But, he said, after the near collapse of Bear Stearns Cos Inc (BSC.N: Quote, Profile, Research), any evidence of similar issues at another bank could lead to a sharp sell-off.

"There's not likely to be a clear-cut trend next week," Praveen said. "We're still in that high volatile period where we have various cross currents. On the negative side will probably be the macro data and news on banks, and on the positive side, any signs the Fed's actions are bearing fruit."

The economic highlight of the week is Friday's jobs report. U.S. employers are expected to have cut payrolls for a third straight month during March. Economists polled by Reuters estimate a reduction of 58,000 jobs.

"I wouldn't be surprised to see a deep negative number, and that will be the final nail in the coffin for the people who are not sure if we're in a recession," said Barry Ritholtz, director of research at Fusion IQ, an investment firm in New York.

"My sneaking suspicion is that we're in the early stages of a recession and that this will be a deeper and longer one than in 2001."

More clues on the state of the economy and the outlook for interest rates could come on April 3, when Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson testify before the Senate.