The Last Week in Review:

The realities of the economy and political unrest finally hit home for the stock market last week. Hopes that the Fed would signal that they're done raising rates, once again turned out to be wishful thinking. A significant correction is not necessarily in the cards, but the outlook for the stock market remains decidedly mixed.

The Fed's quarter point rate hike on Wednesday was accompanied by a policy statement that did not provide the good news the market was looking for. The market had been priced for a high probability that this would be the final rate hike. It wasn't to be. The market however developed a new meaning to the Fed's wording reflecting its high hopes. The Fed had previously given indications that it might "pause" in its current round of rate hikes. The market had turned that word around to make the word "pause" mean "end." The Fed made it clear that neither a "pause" nor the end of the rate hikes is necessarily near.

Stocks reacted and gave up a large portion of early gains last week as inflationary concerns gave many investors reason to rotate into precious metals and commodities. The Dow gave back 197 points reducing its year-to-date gain to 6.2%. The NASDAQ fell 99 points, cutting its year-to-date gain to 1.7%. The S&P closed the week lower by 34 points, shaving its yearly gain to 3.4%. Investors sold small-cap stocks, as the Russell 2000 slid 39 point or 5% shrinking its year-to-date gain to just 10.3%.

The Week Ahead:

Having seen over 90% of the S&P 500 companies already reported numbers, there are few market moving companies yet to report. On Monday Target (TGT) reports their earnings. Tuesday before the open, American Eagle (AEOS), Deere (DE) and Home Depot (HD) will report earnings followed by tech-giants Applied Materials (AMAT) and Hewlett-Packard (HPQ) after the close. On Wednesday (INTU) and Hot Topic (HOTT) reports results. Also on Wednesday, Yahoo! (YHOO), LSI Logic (LSI) and Novartis (NVS) all hold Analyst Meetings. On Thursday Dell Computer (DELL) releases earnings along with Gap Inc (GPS).

Conferences this week include, Merriman, Curhan & Ford who will host an Alternative Energy Conference on Monday in New York. Rodman & Renshaw holds its two-day 3rd Annual Global Healthcare Conference in Monte Carlo. Also on Monday, UBS begins its three-day Global Financial Services Conference in New York. Bank of America Securities 2006 holds their four-day Health Care Conference beginning Tuesday.

The economic calendar has several key reports this week. On Tuesday before the open, April Building Permits figures will be released along with April Housing Starts, the May New York Empire State Index, the widely-watched April PPI and the April Industrial Production and Capacity Utilization figures. On Wednesday morning towards the April CPI report with Weekly Crude Inventories. Thursday, before the open, Weekly Jobless claims will be announced followed by April Leading Indicators and the May Philadelphia Fed Report.

In summary: Investors need to focus on the last few earnings reports this week and watch the PPI and CPI for more signs of inflation.