Stocks: Keep Calm and Carry On?

NEW YORK (CNNMoney) -- Investors will be looking for clues on the global economy and corporate profits in the coming week, after the rally in stock prices ran into a wall.

Stocks are coming off the biggest weekly decline in what has so far been a very strong year. The Dow Jones industrial average fell 1.15%; the S&P 500 declined 0.7% and the Nasdaq slid 0.3% in the holiday-shortened week.

Despite the down week, the major gauges are still up sharply for the year. Last week's retreat came after the biggest first-quarter gain for stocks in over a decade, and many analysts still expect the market to continue higher this year.

The week ended on a sour note after the Labor Department on Friday said hiring slowed sharply in March from the month before. The stock market was closed for Good Friday, but stock futures sank after the report was released, suggesting the market could take a hit Monday.

"The data sets a negative tone for stocks going into next week's events," said Nick Kalivas, market strategist at Hadrian Partners, in a daily letter to clients.

Still, the disappointing jobs report could revive speculation the Federal Reserve will take additional steps to stimulate the economy.

Meeting minutes released last week dashed hopes the Fed will launch a third round of asset purchases, a policy known as quantitative easing, or QE3.

But the latest jobs data means QE3 may be back on the table, according to Kathleen Brooks and Eric Viloria, market strategists at FOREX.com.

"QE3 chatter is making its rounds again in the markets," the strategists wrote in a report.

As a result, investors will pay close attention to comments from Fed officials this week, including chairman Ben Bernanke on Monday.

On Wednesday, the Fed will release the latest edition of its Beige Book, a snapshot of economic conditions across the central bank's regions.

Beyond the Fed, investors are gearing up for the start of the so-called earnings season, when many publicly-traded companies disclose quarterly profit and sales numbers.

On Tuesday, aluminum producer Alcoa (AA, Fortune 500) is expected to report a loss of 4 cents per share for the first quarter, down from a 28 cent profit in the same period last year, according to analysts surveyed by Thomson Reuters.

Tech heavyweight Google (GOOG, Fortune 500) will report results after the market close Thursday, while banking bellwether JPMorgan (JPM, Fortune 500) reports early Friday.

Overall, earnings for the companies in the S&P 500 are expected to be up less than 1% in the first quarter, according to S&P Capital IQ. That would mark a sharp slowdown from the fourth-quarter of 2011, when earnings grew more than 10%.

Meanwhile, the outlook for the Chinese economy will be in focus with reports on inflation, exports and gross domestic product coming up.

China's GDP is expected to have grown at an annual rate of 8.1% in the first quarter of 2012, down from 8.9% in the fourth quarter of 2011, according to economists at Societe Generale. The report comes out Friday.

"In light of the data, the authorities are likely to continue to respond with cautious and selective easing," the SocGen analysts wrote in a report.

Elsewhere in the region, Bank of Japan officials are expected to hold interest rates steady at 1% when the central bank meets Tuesday.

In the United States, economic reports are due on consumer and producer inflation. Investors will also get fresh readings on wholesale inventories, export prices and the U.S. trade balance, as well as a survey of consumer sentiment.

The debt crisis in Europe reared its head last week as yields on Spanish government bonds rose following a less-than-stellar bond auction last Wednesday. Investors had been relatively sanguine about Europe this year, but recent developments have renewed focus on the longer term challenges facing the euro.

Italy will sell bills Wednesday and bonds Thursday, while Germany will auction €5 billion in 10-year notes Wednesday. However, most European stock markets will be closed Monday for the Easter holiday.