A Wall Street rebound early today after six weeks of losses suggests that bargain-hungry investors have been enticed back into the market. However, the housing starts report expected later this week could send limited gains back the way they came.

The market is down nearly 7 percent from a yearly high achieved on April 29, and is dangerously close to a drop of 10 percent, which in industry speak is officially known as a “correction.” The Dow Jones industrial average fell below 12,000 last week, for the first time since March.

Stocks have been pummeled by concerns that the precarious economic recovery is at risk, which Wall Street fears will eat into corporate profits, consumer confidence and investor optimism. Should the downward numbers extends to a seventh week, it would be the longest weekly downdraft in 10 years.

However, the week is off to a promising start. The S&P 500 index and other benchmarks opened higher, only slightly, but the direction is positive. However, there are some variables to keep an eye on that may determine if the upward movement if ultimately sustainable.

  • The Federal Reserve’s $600-billion bond purchase program ends this month, which could affect investor appetites for taking on riskier assets.
  • In some good news for consumers feeling the pain at the gas pump, U.S. crude oil prices fell to $98.53 a barrel on a report of more supply from Saudi Arabia. National gas prices are averaging .70 per gallon as of today, a steep decline from $3.97 just a month ago.
  • In the traditionally robust gold market, bullion prices fell to their lowest levels in 10 days.
  • Experts are also eagerly awaiting The New Residential Construction Report, also known as “housing starts.” The monthly report, expected to be released this week, is issued by the U.S. Census Bureau jointly with the U.S. Department of Housing and Urban Development (HUD), and is viewed as a reliable indicator of current economic health.