Can stocks break out of their funk after three-straight sessions of declines and usher in a strong year-end finish?
The answer depends on Friday's employment report and whether the Federal Reserve thinks the job market is strong enough to warrant a tapering of its $85 billion monthly quantitative easing bond purchases, market watchers told CNBC on Wednesday.
"There has typically been a negative reaction to any of the strength in the economy because everyone worries what the Fed is going to do. But the market then resumes its upward track," said Jim Swanson, chief investment strategist at MFS Investment Management.
In a "Squawk Box" interview, strategist Lou Brien of DRW Trading Group said should go higher if the Fed doesn't scale back its asset buying stocks. "The market has always reacted very well right up to the bitter end of the previous two QEs."
Concern about the Fed pushed the Dow Jones Industrial Average and the lower Tuesday. The Dow dropped 94 points to close at 15,914, while the S&P fell 5 points to 1,795. U.S. stock futures were mixed in early premarket trading Wednesday.
But Brien said investors should not obsess about whether the market goes higher in December, because "we've had a Santa Claus rally most of the year with the Fed acting as Santa's elves."
Swanson made the case for higher stock prices: "The world is getting strong outside the U.S. The S&P is not U.S.-centric anymore. And these large cap companies sell a lot of their goods overseas and that's what's going to be driving ahead."
"You can access that kind of resurgence outside the U.S.," he continued, "by owning a lot of these large cap companies, which actually trade at a pretty steep forward P/E discount to the market as a whole."
—By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.