NEW YORK (CNN/Money) - There's a rally on Wall Street. It's a rally in sentiment.

The major markets have clocked gains for a few weeks despite being hit by mixed earning reports and corporate guidance, as well as growing fears of deflation and a series of weak economic reports.

Traders contend sentiment remains high and could continue to carry the market to more gains in the week ahead, especially in the absence of any economic news on the docket.

Not that the presence of poor readings on the economy has done much to stop the rally. Week after week, investors have grasped at any straw of good news they could get their hands on. Two consecutive reports hinting at the threat of deflation Thursday and Friday did little to dispel Wall Street's will to head higher.

On Thursday, stocks rallied despite a record drop in the producer price index, because the weekly jobless claims report counted several thousand fewer claims than the market had expected. Friday's declines were fairly minor, because a small sample of consumers surveyed by the University of Michigan seemed to have felt more confident in April than they did in March.

"What's sustaining this is a modestly positive outlook for the market," said Douglas Altabef, managing director at Matrix Asset Advisors. "Consumer confidence was stronger than expected (in April)."

Stocks have seen some consolidation in the past few weeks, but haven't been hit by a major pullback. Since March 11, the day many experts peg as the start of this recent rally, the Dow has risen more than 15 percent, the Nasdaq has gained 22 percent, and the S&P has jumped more than 18 percent.

"You look at the consumer confidence report, and I think that's what this is all about," said Peter Cardillo, director of research at Global Partners Securities. "There has been a major psychological change in the consumer's attitude -- that plays a big part in market psychology as a whole. Stocks are poised to go higher before some sort of consolidation."

Check Friday's session here

More evidence of a shift in sentiment was seen in the continuation of cash flow into equity mutual funds last week. New purchases outstripped redemptions for the ninth week in row, according to a Banc of America Securities report.

Worries of deflation that drove Treasury yields to historic new lows last week haven't surfaced in stocks yet. Gold prices remain high. A decline in producer prices, reported Thursday, and a drop in consumer prices, revealed Friday, made only a small dent in equities.

With little economic or earnings news scheduled for the coming week, which precedes the long Memorial Day weekend, stocks could see some consolidation, traders said. But they contend the hope for a recovery in the second half of the year will keep investors in the game.

• Monday brings a reading on the leading economic indicators for April. The report shouldn't come as a huge surprise to investors, as they already will have received much of the information included in it. But it is the first cross-sector reading for the first full month since the start of the Iraq war, so it likely will draw some attention. Economists expect the leading indicators to come in unchanged after a 0.2 percent decline in March.
• Released Tuesday, the Treasury budget is expected to show a drop to $52 billion in April from $67. 2 billion in March.
• Tuesday also brings earnings reports from two Dow components: Hewlett-Packard (HP: Research, Estimates) and Home Depot (HD: Research, Estimates). Wall Street, on average, expects HP to have earned 27 cents a share, compared with 19 cents in the same period last year, according to Briefing.com. Analysts forecast Home Depot to have earned 37 cents a share, a penny better than the same quarter in the previous year.
• The government gives out its weekly report on initial jobless claims Thursday. It will be closely watched, as weekly claims have hung above 400,000, the level that indicates economic weakness, for 13 weeks in a row.