The market is also expecting data on wholesale and retail prices, which will help economists gauge the temperature of inflation and the threat of future interest rate hikes.

Greenspan will give his semi-annual Humphrey-Hawkins testimony on monetary policy before the Senate Banking Committee, and investors are looking for clues as to just how hawkish the head of the Federal Reserve is feeling after several reports of strong economic data.

"The market's expecting them to raise rates because the economy has been advancing at a fairly rapid rate compared to what (the Fed) would like to see," said Joseph Stocke, chief investment officer at StoneRidge Investment Partners in Malvern, Pa.

He said because Greenspan tends to make monetary policy changes slowly and gradually, the chances of the Fed going beyond the forecast 25-basis-point hike to an increase of 50 basis points was real were slim unless this week's economic data had inflationary signals.

The government is due to report the producer price index (PPI) for January Thursday and the consumer price index (CPI) Friday.

If evidence and concerns mount that inflation may turn higher, economists said it may prompt central banks to extend the rate hike cycles started in 1999.

James Volk, co-director of institutional trading at D.A. Davidson and Co. in Portland, Ore., said that although markets tend to lurch quickly after surprising economic reports, for the most part the stock market has been able to absorb strong reports. The Nasdaq is near record levels, although a sell-off Friday brought the high-tech index down slightly and knocked the Dow, which has been well off its highs, into what is generally agreed to be a correction.

The Dow is now down 11.1 percent from its January 14 closing high of 11,722.98. Ned Riley, stock market strategist for State Street Global Advisors of Boston, said that big losses in areas like automakers, paper companies, and home builders are sending a signal that many investors are betting conditions will worsen in the future.

Computing giant Hewlett-Packard Co. is among the big earnings reports due next week. First Call/Thomson Financial pegs analysts' estimates for the fiscal first quarter at $0.77 a share compared to $0.85 in the year-ago quarter. Despite warnings from competitors like Dell Computer Corp., H-P officials have said they expect revenues and profits to grow 12-15 percent in 2000.

Analysts will also be keenly watching the rising price of oil as well as any news of trouble at any large hedge funds. Rumors of some funds getting squeezed by the wild moves in the bond market set nerves on edge last week, analysts said, though much of the fear was quelled after a U.S. debt auction showed no signs of torrid demand.