Markets will be hyper-focused on the economy in the week ahead and whether there's any sign it is getting strong enough to encourage the Federal Reserve to start pulling back the security blanket of quantitative easing.

In the holiday-shortened week, none of the data will make a huge difference in the Fed's decision-making, but it will add to the picture on the economy. There is consumer confidence, pending home sales, personal income, and revised first-quarter gross domestic product. But weekly jobless claims Thursday could be the most anticipated because of what it might say about the job market, a week before the June 7 release of the crucial May employment report, which is important for the Fed.

"CNBC always jokes about how every jobs report is the most important jobs report, but this is the most important jobs report we've seen in a long time," said Daniel Greenhaus, chief global strategist at BTIG (and CNBC contributor). "I'm not saying it will be, but if it comes in at 275,000, it's game over."

Going into Friday, the S&P 500 is down one percent for the week after being up four weeks in a row. So far, the declines we have seen this year — in February and April — have been on the order of three percent. In other words, these sell-offs have been brief and shallow.

While a few high-profile IPOs like Seaworld Entertainment (SEAS) and Norwegian Cruise Lines (NCLH) have caught the investing public's attention this year, the real action has been in secondary offerings. Why? Low interest rates and a stock market that's up 14 percent this year has made this one of the best markets in years to float stock...and debt.

Year to date, there's been 302 secondaries with a value of $81.9 billion, according to DealLogic. That's the highest number of secondaries year-to-date since 1998, and the highest dollar value since 2009.

The secondary charge has been led by Real Estate and Property companies, which have raised roughly one-quarter of the total amount. That makes sense: real estate is one of the bright spots of the U.S. economy...real estate companies are raising stock to fix up their balance sheets and to raise cash for acquisitions. Companies that have floated secondaries include Realogy (RLGY), which owns the Century 21 and Coldwell Banker real estate franchise.

Other sectors with heavy secondary offerings include Oil & Gas (12 percent of the total), Utility & Energy (9.9 percent), and Healthcare (8.8 percent).

Even retailers like Michael Kors (KORS) have gotten into the act, with at $1.5 billion secondary in February.

This is not just a stock market phenomenon: with rates at historic lows, both high-grade and junk bond issuance has also soared, led by Apple's (AAPL) $17 billion offering.

The business of announcing secondaries can be tricky, since putting additional stock on the market can sometimes depress the share price. But with a steadily rising stock market, there are few cases where new stock has pushed prices down. In some cases, it can help.

Case in point: Restoration Hardware (RH), which priced a secondary May 15th at $50; the stock had been $40 on the 10th, when they updated their guidance; it popped again when the secondary was announced on the 13th.

Check out which companies are making headlines before the bell on Friday:

Abercrombie & Fitch —The clothing retailer reported a quarterly loss of 9 cents per share, four cents wider than estimates, with revenue falling short of consensus as well. Abercrombie's full year forecast is also short of estimates, after a quarter which saw comparable store sales fall by 15 percent.

Foot Locker — The athletic shoe and apparel retailer earned 91 cents per share, excluding certain items, three cents above estimates. Foot Locker's quarterly profit reached a record high, as comparable store sales rose 5.2 percent.

Legitimate or not? NYSE lets stand trades in utilities American Electric Power (AEP) and NextEra Energy (NEE), but removes many trades from the tape.

The NYSE has let stand all trades in AEP and NEE. But in an additional decision that is raising eyebrows, it has decided to remove all trades from the tape that were roughly three to four percent below the opening price.

To recap: AEP opened at $48.18, just below the prior close, but quickly traded down on several exchanges to as low as $22.28.

NEE opened at $78.62, also just below the prior close, but quickly traded down to as low as $30.37.

NYSE officials quickly met to review whether any of those trades should be busted under the clearly erroneous trade rule, which allows trades to be busted if there is a mistake in the order. The rule is very clear: "A Clearly Erroneous Execution ("CEE") is an execution with an obvious error in any term, such as price, number of shares or other unit of trading, or identification of the security."

Was there an error made? The NYSE determined that the trades were based on market orders, limit orders, and stops that drove pricing down. In other words, legitimate orders.

The trades stand. Even the ones for AEP at $22.28 and NEE at $30.37.

OK, fair enough. They were legitimate orders, and the trades stand. Here's something that bugs me: the NYSE also said that all trades in AEP at or below $46.03 between 09:30:00 a.m. and 09:31:00 a.m. and all trades in NEE at or below $76.19 between 09:30:00 a.m. and 09:31:00 a.m. will be marked with an Aberrant Report Indicator.

What's that? Let the NYSE explain: "The NYSE notes that executions at these prices are still valid trades, but they will be excluded from the high and low data disseminated by the Consolidated Tape Association."

Huh? You mean the trades are still valid but the worst ones will never appear on the tape? That's exactly what it means.

Why? I am going to speculate: imagine being AEP. You're a dull utility. Investors buy your stock for yield and stability. Suddenly the whole world knows you had a trade at $22 and change, when your stocks was $48. It might make some think you're too volatile to own. Screaming executives.

The NYSE is now caught between a rock and a hard place. They have a stupid circuit breaker rule that does not allow circuit breakers to be used at the open (see below) that was forced on them and all the exchanges by the SEC, so it's not really their fault. But they have to mollify a customer--in this case, AEP and NEE. What to do?

Let the trades stand, but declare that the worst ones are "aberrant." No one sees them.

Sorry, I understand the dilemma, but this doesn't smell entirely right. Is it a legitimate trade or not? If it is, it shouldn't be hidden.

The companies are not happy. Moray Dewhurst, Vice Chairman and Chief Financial Officer, NextEra Energy, Inc., sent in the following statement to CNBC: "We are continuing to try to understand exactly what happened in the first few minutes of trading in our stock this morning. This is naturally a concern for all our shareholders and potential shareholders. This type of market behavior is not what we would expect from a well-functioning and well-regulated exchange."

Move on: how did this happen in the first place? There are two problems:

First, there is no circuit breaker protection for individual stocks between 9:30-9:45 a.m. ET and 3:30-4:00 p.m. ET. In other words, right after the open and right before the close.

During the rest of the day, the new circuit breakers (known as Limit Up, Limit Down) put trading halts on stocks that drop more than five percent in the prior five minutes.

Circuit breakers with full protection for the entire day (9:30-4:00) comes into effect on August fifth.

August fifth? That is no consolation. There is a major rebalancing at the close next week, and traders are nervous that could cause problems.

Don't blame the NYSE nor the NASDAQ: this was an SEC ruling. ALL the exchanges objected to not having circuit breakers in effect at the open or the close, but they were overruled by the SEC. Why? Not clear, but the SEC probably felt that they were unsure how well the new circuit breakers (which came into effect a few months ago) would work in the real world and wanted to avoid having them during the two most volatile times of the day.

That was wrong thinking: the circuit breakers have worked well. If they were in effect at the open--or the old NYSE circuit breakers were in effect--the problems with AEP and NEE would not have happened.

Second, books are thin. The opens are notoriously thin; there is very little stock to buy or sell on any of the order books.

Why did it happen with these two stocks? It's not clear, but it's likely the mix of market orders on top of unusually thin books. Remember: unless traders put a stop order in, a market order can quickly deteriorate.

This happened last week in Anadarko Petroleum (APC), when three large sell orders hit the tape in the last minute, causing APC to go from $90 to some trades that were executed at a penny. The NYSE then stepped in under the clearly erroneous trade rule and canceled all trades below $85.76, which was several percent below the last trade. So those trades were deemed a mistake.

Check out which companies are making headlines after the bell Thursday:

Retailer Gap reported first-quarter earnings of 71 cents per share, beating forecasts for 69 cents, as same-store sales rose 2 percent. Shares were lower in extended hours trading.

Pandora shares jumped in after-hours trading. The online music-streaming service reported a first-quarter loss of 10 cents a share on revenue of $128.5 million. Analysts had expected a loss of 10 cents a share on $124 million in revenue. For the second quarter, Pandora forecast between a loss of 2 cents and a profit of 1 cent on revenue of $155 million to $160 million, above expectations.

Take a look at some of Thursday's midday movers:

Sempra Energy (SRE) was the worst performer on the S&P 500 after the energy company lowered the top end of its guidance for 2013 and offered a weak outlook for 2014.

Shares of software game maker Electronic Arts trended higher. A Morningstar analyst suggested that improved functionality of Microsoft's Xbox One may benefit makers of sports games. Stifel Nicolaus raised its price target on Electronic Arts to $26 from $22.

Have two Pandora's Boxes been opened? Fed Chairman Ben Bernanke may have opened the first one. No matter that it is highly unlikely economic data will come in showing sufficient strong and sustained growth to justify tapering bond purchases any time soon — markets see it differently.

The bond market is wound so tight that even raising the remote possibility of ending tapering of bond purchases has thrown prices into a tizzy.

Check out which companies are making headlines before the bell on Thursday:

Hormel Foods — Hormel earned 46 cents per share for its second quarter, three cents below estimates, with revenues also short of consensus. The food producer was impacted by weakness in the Jennie-O Turkey segment, as well as lower profit margins and higher overhead costs.

Hewlett-Packard — HP reported fiscal second quarter profit of 87 cents per share, excluding certain items, six cents above estimates. Revenues were short of consensus forecasts, but HP raised its full year guidance above analyst projections. The computer maker is having some success increasing its sales of enterprise computing services.

Volatile trading in stocks and bonds could continue as investors sort out what's going on with the Fed and whether markets have come to some sort of inflection point.

That makes every bit of economic data even more important, since the Fed has made clear its path will be determined by the progress of the economy, and employment in particular.

(Read More: Pisani: Traders Overreact to Bernanke's Testimony)

Thursday's reports include weekly jobless claims at 8:30 a.m. ET; U.S. manufacturing PMI at 8:58 a.m..; FHFA home prices at 9: a.m. and new home sales at 10 a.m. U.S. markets will also be watching PMI data for China and the euro zone.