Wall Street Week Ahead: Stock bulls eye Spain, Bernanke and jobs

75 Wall Street (Photo credit: SheepGuardingLlama)

New York, sept.29, stock advice . – Wall Street will open October with a busy week, highlighted by low expectations for global manufacturing data and the U.S. jobs report, but that could set the stage for positive surprises that help lift the market.

The SP 500 <.inx><.spx> finished its third positive quarter in the last four on Friday, despite suffering its largest weekly percentage decline since June. For the past three months, the SP 500 gained 5.9 percent – its best third quarter since 2010. In contrast, the index was down 1.3 percent for the week.

The benchmark SP 500 earlier this month reached its highest level since late 2007. Yet uncertainty remains over whether stocks can hold their gains against the headwinds of a struggling economy. That explains, in part, the retreat over the last several days.

The SP 500 hit a high of 1,474.51 in mid-September before pulling back by a bit more than 2 percent. A run at 1,500 seems possible, but the flurry of economic and world events ahead probably will prevent a major advance in the coming week.

Bulls are betting this week’s Spanish budget proposals will be a preamble to a bailout request byMariano Rajoy‘s government. The move would be seen as a first step to get the finances of the euro zone’s fourth-largest economy in order and would clear some of the market uncertaintyregarding the euro zone crisis.

Monetary policy is also on the list of market catalysts next week. Federal Reserve Chairman Ben Bernanke is scheduled to speak on Monday and the minutes of the latest FOMC meeting are set for release later in the week. The week’s agenda includes meetings of the European Central Bank, the Bank of England and the Bank of Japan.

“I think we could see a rebound next week if we get some of the stars aligning and have Spain ask for a bailout, the ECB announcing favorable terms for that bailout, and if we see the Bank of Japan announce further monetary intervention,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

“If Spain and the ECB don’t deliver, we could set ourselves up for a further lateral move in the markets. A negative would be if Rajoy flat-out denies that they need a bailout.” ... Continue to read.

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