By Laura Mandaro

With the recession in their review mirrors, stock investors are looking for signs whether the economic recovery will be swift and smooth, as charts seem to suggest, or take a bumpy, painful detour.

Markets, having just hit new highs for the year, are looking to reports on August home sales plus the closely watched weekly employment numbers for clues.

Housing data "have been in improvement mode, and as long as they continue in that mode, which we believe they will, we believe they will put more support into the market," said David Chalupnik, head of equities at First American Funds, a unit of U.S. Bancorp that manages $72 billion in assets.

The Federal Reserve on Wednesday is scheduled to release its statement on monetary policy. That statement may give more insight into how and when the Fed will unwind its quantitative easing programs, or its unprecedented forays into the private bond and loan markets that have effectively created more cash in the financial system.

As far as the Fed goes, the less change of plans the better for stock investors, says Chalupnik.

"We want to see a continuation of support for programs that are in place," he said. "You need the Fed to stay in there longer to see how long this recovery will be sustained."

Also in the week ahead, two homebuilders report results, starting with Lennar Corp. (LEN) on Monday. KB Home (KBH) is set to report on Friday.

BlackBerry maker Research in Motion (RIMM) and packaged food-producer General Mills (GIS) will also release results.

On Thursday and Friday, the world's leaders descend on Pittsburgh for the G20 meetings, when they are expected to tussle over proposals on curbing bankers pay and could discuss simmering trade disputes. The presidents and prime ministers of the world's major economies are expected to offer little, if anything, in the way of new measures to boost global recovery, though markets could respond to statements suggesting they're keeping stimulus programs in place. Comments along those lines swayed currency and commodity markets after the G20 finance leaders met earlier this month.

Week past: New '09 highs

U.S. stock indexes reached new highs for the year in the past week, with the S&P 500 (SPX) topping 1,071 intraday on Friday and the Dow Jones Industrial Average (DJI) coming less than 200 points below the key 10,000 mark.

Comments from Fed Chairman Ben Bernanke and private sector economists that the recession likely had ended this summer encouraged investors to bid up stocks in companies seen as benefiting from global recovery.

General Electric Co. (GE) lifted itself into a year-to-date gain as its shares advanced toward a 12% gain for the week. Caterpillar, Inc. (CAT) shares rallied 10% for the week.

A surprise surge in retail sales, helped by the U.S. government "cash for clunkers" auto-sales rebate scheme; the second straight monthly expansion in industrial production; and a jump in the Philadelphia Federal Reserve Bank's business conditions index supported stocks in the past week.

Week ahead: home sales

In the week ahead, better news on housing and unemployment will have to do the heavy lifting.

Economists polled by MarketWatch anticipate the pace of existing and new home sales quickened in August.

Analysts also are looking for a continued, moderate improvement in the Thursday release of weekly jobless claims. Initial jobless claims in the week of Sept. 12 declined to 545,000.

"With markets anxiously awaiting signs of stabilization in the labor market, the weekly claims reports take on added importance," Nomura Securities economist Zach Pandl wrote in a note Friday. "So far the data only show evidence of very gradual improvement."

The gradual and potential bumpy recovery is the one that Fed chief Bernanke described Tuesday when he noted "difficult challenges still lie ahead," and should prevent the Fed from acting quickly to back off any of its monetary stimulus, analysts said.

They widely anticipate that the Fed will hold its key interest rate near zero percent at its upcoming meeting. It may signal a decision to taper off its purchases of its mortgage-related securities, much as it has done with buybacks of Treasurys. But, analysts said, the Fed is likely to keep the stimulus flowing.

Any signs the central bank will move quickly to tighten could derail the market, said First American's Chalupnik. The S&P 500 (SPX), while still below year-ago levels, has rallied 60% since its March lows.

Despite September's history as a month when investors generally lose money in the market, stocks have actually picked up speed this month. The Nasdaq Composite (RIXF) has rallied 6.2%. The S&P 500 has gained 4.7%.

Mark Arbeter, chief technical strategist at S&P Equity Research, says steep runs of the type the S&P 500 has just clocked usually give way to a temporary pull back. Since September 2, the benchmark has gained 7.3% and risen nine out of 11 sessions.

"We have seen a cluster of these types of performances by the S&P 500 since the bear market bottom in March, and each time, the index either paused or saw a small retrenchment in prices over the very short term," he wrote Friday.

"We think the stock market may take a much needed rest in the near term."