NEW YORK, July 27 - U.S. stock investors will sift through reams of economic reports, including July payrolls and second-quarter gross domestic product, as they search for catalysts this week that could trigger a recovery on Wall Street.

With worries about the impact of the housing slump on the economy and the profit outlook keeping stocks in a bear market, data that points to strong growth will help put investors on firmer footing.

This week's data will come on the heels of separate reports on Friday showing U.S. consumer sentiment rebounded in July from a 28-year low and business inventories rose unexpectedly last month. Data also revealed that June new-home sales were not as weak as expected, helping to dispel the gloom -- and lift the market.

But even if this week's economic reports help fuel optimism, there probably will still be plenty of concerns about whether the financial sector has seen the worst of the credit crisis.

The government's plan to bolster the nation's mortgage finance companies Fannie Mae and Freddie Mac brought calm in the past week on Wall Street, but a sense of "all clear" still eluded the market.

The main event on the crowded data calendar will come on Friday, when the Labor Department releases July's payrolls report, and the Institute for Supply Management gives its July reading on the manufacturing sector. Domestic car and truck sales for July are also set for release throughout the day.

"Unemployment jumped to 5.5 percent recently, so if we get another tick up and another month of job losses, it will just reinforce the negative long-term loop we're in," said Joseph Battipaglia, market strategist at Stifel Nicolaus in Yardley, Pennsylvania.

IT'S RAINING NUMBERS

But before that, investors will have to scour through thickets of other crucial numbers. Consumer confidence is set for release on Tuesday by the Conference Board, a private New York-based research group.

Earnings will keep streaming in from marquee names, including Exxon Mobil Corp, Walt Disney Co, Verizon and Starbucks Corp.

The government's advance reading on second-quarter GDP is due out on Thursday, along with a barometer of business activity in the U.S. Midwest from the National Association of Purchasing Management-Chicago.

Second-quarter gross domestic product, which is the output of goods and services within U.S. borders, is expected to have grown at an annual pace of 2.0 percent. First-quarter GDP was reported to have grown at an annual rate of 1.0 percent.

"The jobs number historically has a big impact on the market, but I think a lot of people will also pay a lot of attention to the GDP number as there's been a lot of debate about whether we're in a recession or not," said Cleveland Rueckert, a market analyst at Birinyi Associates Inc in Stamford, Connecticut.

A loss of 75,000 jobs in July is forecast by economists polled by Reuters. In June, U.S. nonfarm payrolls shed 62,000 jobs. The unemployment rate is forecast to rise to 5.6 percent in July from 5.5 percent in June.

GIMME SHELTER

The uneasiness about the financial sector was apparent on Friday as shares of major banks, including Bank of America and Wachovia, kept a lid on a broader market advance.

For the week, the Dow Jones industrial average fell 1.1 percent and the Standard & Poor's 500 Index slipped 0.2 percent. In contrast, the Nasdaq Composite Index gained 1.2 percent.

Ratings agency Standard & Poor's said on Friday it may cut the subordinated debt and preferred stock ratings of Fannie Mae and Freddie Mac, tempering some of the optimism generated by better-than-expected June new home sales and and a stronger-than-expected reading on consumer sentiment.

Fannie Mae and Freddie Mac are the two government-chartered companies that own or guarantee nearly half of the $12 trillion in outstanding U.S. mortgage debt. Together, they have lost billions of dollars on bad home loans.

"It is probably too soon to think that the economy is turning around. There is still a lot of weakness, a lot of uncertainties. Financial markets are still obviously very unstable," said Anna Piretti, senior economist at BNP Paribas, in New York.

On Friday, a sweeping bill to aid the battered U.S. housing market and help bolster the mortgage finance system cleared a procedural hurdle in the Senate, setting it up for a Saturday vote.

OIL AT A 7-WEEK LOW

The drop in crude oil prices on Friday to a seven-week low helped the stock market, but it was not enough to completely overcome investors' hesitation about the financial sector.

The bursts of buying that drove the gains last week on Tuesday and Wednesday happened so fast that they could not be viewed as a signal that stocks were ready to shift up and away from the bear market, analysts said.

"The thing that we're looking for in the market is longer-term buying, so when you see stocks move up quickly, that's worrying," Birinyi Associates' Rueckert said.

He noted that the advance that financials notched early this past week had quickly dissipated.

"What will be best to move out of the bear market is sustained, steady buying that is characteristic of a bull market."

Rueckert said he expected "a more sideways trading in oil, between $120 and $130 a barrel."

U.S. crude for September delivery settled at $123.26 a barrel, down $2.23 for the day on the New York Mercantile Exchange. Earlier in the day, the NYMEX September crude contract slid to a session low at $122.50, its lowest level since June 5.

"The principal focus is clearly on what I would call the unwinding of the oil bubble, and as that goes, so goes the outlook for the economy," said Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York.

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