In S&P battle, can bulls gain the edge?

New York: It will be another battleground for the S&P 500 index this week. Will the bears finally give up and let the bulls have their way?

The S&P 500, the market's broadest measure, managed to close out last week above the psychologically important 1,400 mark for the first time since early April. But the index is still down 0.4 per cent for the month so far even after gaining 1.8 per cent for the week, with only one trading day left in April.

Brian Lazorishak, senior quantitative analyst and portfolio manager at Chase Investment Counsel in Charlottesville, Virginia, said a close above 1,400 is positive, but the recent high, near 1,422, is a more important technical level.

"That's what we're looking for on the upside as confirmation there's room to move higher," Lazorishak said.

"A close above that would open the window to testing highs back to early 2008. The next natural area you'd see is a run to at least 1,440, the May 2008 high."

This week's release of a slew of economic data on the US labour market and the beginning of the latter half of corporate earnings will be keenly watched to see if they are enough to allow stocks to break above the recent trading range.

The S&P 500, up 11.6 per cent for the year, jumped 4.4 per cent in January, 4.1 per cent in February and 3.1 per cent in March, but is down 0.4 per cent so far this month.

"The sideways action we have seen over the past few weeks was enough to alleviate any overbought conditions that existed in the market a month ago," said Larry McMillan, president of options research firm McMillan Analysis in a report on Friday.

"Thus, the market has the potential for another leg higher in this longer term uptrend, one that began early October 2011," he said.

At the top of investors' radar screen this week will be the government's closely watched monthly jobs report for April, to be released on Friday. Jobs growth in March slowed to 120,000, the smallest increase since October, disappointing investors even though the unemployment rate fell to a three-year low of 8.2 per cent.

Payrolls report

Ahead of the government's payrolls report, investors will be watching the ADP Employment Report due on Wednesday and weekly jobless claims data due on Thursday for indications of whether the labour market is gaining momentum.

Corporate earnings, which drove gains in stocks last week, will also be in focus.

As of Friday, 57 per cent of the S&P 500 companies had reported first-quarter results. Of those 287 in the S&P 500 that had reported earnings, 72.8 per cent posted results that topped analysts' expectations, according to Thomson Reuters data.

Companies due to report earnings this week include Chesapeake Energy and Pfizer on Tuesday; Prudential Financial, Time Warner and Visa on Wednesday; and Kraft Foods and Via-com on Thursday.

Also on the agenda this week, Jamie Dimon, chief executive of JPMorgan Chase, has organised a meeting of major bank chief executives with Federal Reserve Governor Daniel Tarullo, the central bank's point man on regulation, according to The Wall Street Journal on Friday.

The meeting, slated for Wednesday in New York, is expected to focus on a Fed proposal to limit banks' exposure to other firms and governments, though other regulatory concerns likely will be discussed.