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NEW YORK (CNNMoney.com) -- The stock advance has hit some resistance in the last two weeks and it's only going to get tougher as the third quarter reporting period gets underway.

Since hitting rally highs nearly two weeks ago, the broad S&P 500 index has lost 4.3% as investors have sorted through a spate of manufacturing, consumer and jobs reports that have missed forecasts.

The standout was Friday's September jobs report, which showed the unemployment rate spiked to 9.8%, a new 26-year high. On top of that, employers cut a whopping 263,000 jobs from their payrolls during the month.

But the stock market's decline over the last two weeks was pretty minimal, considering the nearly seven-month run up that propelled the S&P 500 by 51.2%.

That rally was driven by extraordinary amounts of monetary and fiscal stimulus and a spate of "less bad" news as the economy moved from recession to stabilization to the start of a recovery.

But lately there's been a change, with the trend going from 'less bad' to 'less better' economic news, said Karl Mills, president and chief investment officer at Jurika Mills & Keifer. "The market is trying to understand that switch."

Although he says the recent trend doesn't undermine signs of a recovery, it does indicate that the road ahead is a lot more twisty than the stock market rally would imply.

Investors are now moving into a sorting period, he said, where they are separating the wheat from the chaff, in terms of good and bad assets. He said that the period of more speculative, so-called lower quality names leading the rally will end as higher quality names start to take over.

"We are moving into a new phase, from collapsing to rebounding to recalibrating," he said.

Financial results: The week ahead is pretty mild in terms of economic reports, with a reading on the services sector of the economy and Treasury's $60 billion in debt auctions the big standouts.

But it also brings the start of the third-quarter reporting period, albeit a very small start, with only one notable company due to report.

Dow component Alcoa (AA, Fortune 500) is the unofficial start to the quarterly reporting period, as per usual. The aluminum maker is expected to report a loss of 12 cents per share versus a profit of 37 cents a year ago.

The weakness in Alcoa is indicative of a materials sector that is expected to take it on the chin in the third quarter. The sector is expected to see earnings fall 68% from a year ago, followed by energy, down 64% from a year ago. Financials, by default, are expected to show the best results, as the companies bounce off dismal results accrued in the third quarter of 2008. Financials are expected to post earnings growth of 59%.

Overall, "we're looking for another down quarter, the ninth in a row and the longest streak since we began calculating the growth over a decade ago," said John Butters, senior research analyst at Thomson Reuters.

Overall S&P 500 profits are expected to have dropped 24.8% from a year ago, he said.

Monday: The Institute for Supply Management (ISM)'s services sector index is due shortly after the start of trading. Last week, the ISM's manufacturing index showed a surprise decline that rattled investors. The services sector report is expected to show growth, rising to 50 from 48.4.

Treasury is auctioning $30 billion in six-month bills and $30 billion in three-month bills, with results due in the early afternoon. Wall Street will be looking to see what kind of demand the auctions draw, particularly from international investors, as the government seeks to fund trillions in economic stimulus projects.

Federal Reserve Vice Chairman William C. Dudley is due to speak.

Tuesday: The World Business Forum runs Tuesday and Wednesday in New York, with participants including Bill Clinton, T. Boone Pickens, Jack Welch, George Lucas and Paul Krugman.

The IMF and World Bank Group annual meeting in Istanbul runs through Wednesday.

Wednesday: August consumer credit, the September Treasury budget and the weekly oil inventories report are all due throughout the session.

Thursday: The weekly initial claims report from the Labor Department is due before the start of trading. No analyst estimates were available as of Friday.

Wholesale inventories are expected to have fallen 1% in August, after declining 1.4% in the previous month. The Commerce Department report is due shortly after the start of trading.

Federal Reserve Chairman Ben Bernanke is due to speak on the Fed's balance sheet.

Also Thursday, Federal Reserve Governor Daniel K. Tarullo is due to speak.

Friday: The August trade balance is due before the start of trading. The trade gap is expected to have widened to $32.9 billion from $32 billion.

Federal Reserve Governor Donald L. Kohn is due to speak.

The bond market closes early ahead of the Columbus Day holiday.