Bolstered by falling oil prices and a rising dollar, US stocks could extend their modest gains next week, even in the face of still troubling consumer- and housing-related data.

Wall Street could extend gains next week if financial results from market bellwethers and data suggest the U.S economic slowdown isn’t as dire as once feared.

A slide in energy prices is a welcome boost in an economy hamstrung by the housing slump and mounting mortgage losses in the financial services sector. In the near term, consumers and business should feel some respite as energy costs recede, boosting prospects for a range of market constituents, including airlines, retail, industrial and technology sectors.

Oil’s downward trend helped boost consumer spending slightly in the past month, with crude hitting a three-month low below $114 a barrel on Friday. But its path remains volatile, prompting some investors to remain cautious about the market.

The dollar’s recent jump suggests to some that the health of the US economy could improve. The US economy began weakening before others and now that investors are seeing poor economic data from Europe and Asia, some think the United States is closer to a recovery than others.

“For the past two years, crude has followed the dollar almost lock-step.”

“The strength we’ve seen in the dollar is almost certainly helping bring crude down. At this point, as you move backward, it actually acts as a stimulus on the economy.”

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