korea mothball: Market Snapshot: Jobs data, ECB entice investors back from beach

By Wallace Witkowski, MarketWatch

A woman fills out an application form at a career fair in New York.

SAN FRANCISCO (MarketWatch) ? Jobs data and a European Central Bank meeting will dominate next week as investors return to a market that, with little fanfare, just finished three months of gains.

While the monthly unemployment report has always figured heavily on investors? minds, it took on particular significance Friday as Federal Reserve Chairman Ben Bernanke called the recovery in the labor market ?painfully slow? and signaled a willingness to use more quantitative easing tools. Read more on Bernanke's Jackson Hole speech.

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?What we?re telling investors is to keep it simple and focus on jobs, period,? said Brian Belski, chief investment strategist at BMO Capital Markets. ?Jobs and the pace of growth spiders into housing starts, home sales and [Institute for Supply Management] data for all intents and purposes.?

Bernanke?s comments drove markets higher Friday to cap a third month of stock gains during a low-volume, low-volatility summer. While stocks finished down for the week, the Dow Jones Industrial Average /quotes/zigman/627449 DJIA +0.69% ?rose 0.6% in August and 5.6% over the past three months.

Similarly, the S&P 500 Index /quotes/zigman/3870025 SPX +0.51% ?rose 2% for the month and 7.4% over the past three, while the Nasdaq Composite Index /quotes/zigman/123127 COMP +0.60% ?advanced 4.3% in August and 8.5% for the past three.

Volume was very weak, even for the summer, as investors stayed on the sidelines ahead of Friday?s Bernanke speech and a heavy schedule of potentially market-moving events in September. Volume in New York Stock Exchange-listed shares was 3 billion in August, the lowest monthly average since May 2007. Read more in Market Snapshot.

U.S.week ahead: Amazon, jobs

August's jobs data is due next week. Plus, the European Central Bank announces a monetary-policy decision on Thursday and Amazon holds an event in Los Angeles.

U.S. financial markets are closed Monday for the Labor Day holiday.

While construction spending, ISM manufacturing and services data, along with productivity data are all on deck in the coming week, the most important days will be Thursday and Friday, when jobless claims and payrolls data come out, respectively, Belski said.

What makes this week?s jobs data so compelling is that it?s likely to set the tenor of the Sept. 13 Federal Open Market Committee meeting.

?We don?t have a lot of data until the FOMC but the jobs report will be the big one,? said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

Luschini thinks the likely outcome from the FOMC meeting will be an extension of low interest rates out to 2015, or a correlation of interest rates to economic rather than calendar milestones. He said the Fed will likely make more bond purchases only if jobs data disappoint.

Regardless of the coming week?s economic data, the Fed?s willingness to take easing actions are going to further support stock prices, said Andrew Slimmon, managing director of global investment solutions at Morgan Stanley Smith Barney.

Bernanke?s speech on Friday reinforced the No. 1 rule of investing in equities: ?Don?t fight the Fed,? Slimmon said.

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