Stocks: Job market to steal the show

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The fourth quarter kicks off with a series of important reports on the U.S. economy.

While data from across the economic spectrum is expected this week, investors will pay most attention to reports about jobs. Figures about private sector job growth from paycheck processing firm ADP (ADP) and a reading on initial claims will give a preview of what's going on in the labor market on Wednesday and Thursday.

But those figures lead up to the main event on Friday, when the Labor Department releases its employment report.

Last month, the economy added only 96,000 to payrolls, less than what's needed to keep up with population growth. And while the unemployment rate fell to 8.1%, the improvement came as a result of nearly 400,000 of those without jobs stopping their search for work.

The persistent weakness in the labor market was a major factor in the Federal Reserve's decision to pump more money into the economy through the purchase of mortgage bonds in a third round of quantitative easing, popularly known as QE3.

Investors will get a glimpse into what went into the central bank's decision to announce QE3 when the Fed releases minutes from its September FMOC meeting on Thursday. Since the Fed's decision leaves the size and duration of the stimulus open-ended, investors will be mining the minutes for clues as to what it plans to do next.

Any improvement or slowdown in the economy could impact how much and how long the central bank intervenes, which explains why economic data has come under even more scrutiny since the Fed announced it stimulus measures.

Related: Obama may be a job creator after all

Besides data on the jobs market, investors will look for reports on the manufacturing sector, as the Institute for Supply Management releases a report on the sector's strength in September on Monday.

Manufacturing activity in the U.S. has contracted three months in a row, according to the ISM's most recent reports. And given that last week's Chicago Purchasing Managers Index for September came in far below expectations and showed a contracting economy for the first time since 2009, investors aren't expecting this week's report to be any better.

General Motors (GM), Ford (F), Toyota (TM), Honda (HMC) and other automakers are due to release sales figures for September on Tuesday.

Only a small handful of companies are on tap to report earnings this week, including agricultural companies Mosaic (MOS) and Monsanto (MON), hotel owner Marriott (MAR) and wine and spirits maker Constellation Brands (STZ).

Analysts aren't expecting much movement in the market despite the fact that investors will get a clearer picture of where the economy is headed. According to Brian Gendreau, market strategist with Cetera Financial, that's because the numbers will be more of the same.

"We're in a period of slow growth and the outlook hasn't really changed," he said. "With the data this week, I fully expect the reports to show that we're in a weak economy with slight improvement."

Throwing kitchen sink at Europe mess
Throwing kitchen sink at Europe mess

While most of the attention will be on the U.S. economy this week, Europe will once again share the spotlight ahead of the European Central Bank's Governing Council meeting on Thursday. Worries over the eurozone were reignited last week, as Europeans protested austerity measures in Greece and Spain.

Spain passed two major hurdles last week when it proposed its 2013 budget and results from an independent auditor's stress test fell in line with expectations. But worries over Spain's banking trouble persist. Many think it's just a matter of time before the ailing nation asks for a bailout.

Related: Most Spanish banks pass stress tests

U.S. stocks finished the year's third quarter with solid gains, but were lower for the week. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq ended the week down between 1% and 2%.

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