8:19 PM
By Caroline Valetkevitch
NEW YORK | Fri Sep 24, 2010 9:25pm EDT
NEW YORK (Reuters) - Stock investors will head into next week wondering if September will end as strongly as it began for the market, with manufacturing and personal income data among the top indicators on tap.
The data will be watched for further clues on whether the economic recovery is still on track and to see if the market's recent rally has support.
Friday's advance left the three major U.S. stock indexes with gains for the fourth week in a row, boosting investors' confidence that the upward move will continue.
The Standard & Poor's 500 index .SPX is up 9.5 percent since the end of August. Its move above the 1,130 level on Monday represented a technical breakout that analysts said suggested further gains were likely.
If the rally holds, it would make September the best month for the S&P 500 since at least March 2000, and the best September for stocks since 1939, according to Reuters' data.
"Sentiment has turned sharply higher over the past few weeks after very bearish readings last month," said Michael Sheldon, chief market strategist at RDM Financial, in Westport, Connecticut.
The data next week includes two manufacturing reports -- one from the Institute for Supply Management and another from the ISM-Chicago, better known as the Chicago Purchasing Managers Index. A Commerce Department report on personal income and spending is also on the agenda.
The last ISM manufacturing report "helped propel the markets higher," Sheldon said, so "any disappointment could be a setback" for stocks.
OF FACTORIES AND PERSONAL FINANCE
Tepid demand amid a U.S. unemployment rate of 9.6 percent is expected to have caused a slowdown in manufacturing activity in September. The Institute for Supply Management's manufacturing index probably dropped to 54.5 in September from 56.3 in August, according to a Reuters poll of economists. A reading above 50 indicates expansion.
Data next week is also expected show moderate gains in personal income and consumer spending in August, consistent with views of an economy that is on a slow growth path, but not contracting. Both reports are due on Friday.
Next week also brings consumer confidence data, on Tuesday, as well as the Thomson Reuters/University of Michigan's final September reading on its consumer sentiment index on Friday.
The final figures on second-quarter gross domestic product will be out on Thursday, with the Reuters poll forecasting growth at an annual rate of 1.6 percent -- matching the second, or preliminary, reading on the quarter's GDP.
On Friday, September domestic car and truck sales will be reported. A rise in total vehicle sales to an annual rate of 11.50 million units is seen versus August's 11.43 million.
READING THE S&P'S SIGNALS
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