It's been quite awhile since holiday shopping has been such a wild card for the economy.
As a result, the early signals from retailers, credit card companies, and shippers take on even more importance as investors attempt to glean whether the consumer will be willing to spend or not.
Both American Express and FedEx made encouraging comments Tuesday, and a string of retailers reporting earnings this week will be watched for comments on the holiday outlook.
American Express said card spending improved in October, to the highest level since last December. October was down just 1 percent from last year, compared to September's 5 percent decline and the 10 percent drop in August.
FedEx said it expects to have its busiest day ever on Dec. 14 and sees a million more packages shipping than on its busiest day last year. Not only does it see the 8 percent volume increase, it will be adding 14,000 temporary and part time workers in November and December to help with the holiday rush.
Wednesday kicks off the batch of major retail earnings, when Macy's reports ahead of the opening bell. It will be followed Thursday by Wal-mart, Kohl's and Nordstrom.
Last week, some higher end retailers - Saks and Nordstrom - showed a surprise increase in October sales.
"You've got some signs of life when it comes to the consumer," said Jefferies managing director Art Hogan.
Of course, all those signs of improvement are off extreme lows from last year. But Deutsche Bank chief economist Joseph LaVorgna said the retail season could be a surprise. "I think that people have baked in a case really of no consumer spending in their forecast," he said.
"We're not at the point where we're rebuilding inventories. The absolute level of inventories looks like it's still shrinking. If you have a good holiday shopping season and retailers and others are further able to clear up remaining inventories, you really set yourself up for a nice cyclical bounce for early in the year," he said.
The Dow Tuesday drifted most of the day, gaining 20 to 10246, while the S&P 500 was basically flat at 1093.
Even so, there were dozens of stocks in the S&P 500 that made new 52-week highs, as did the S&P retail index. Some of those stocks would be clear winners in a consumer recovery. They included Amazon.com, Pepsi, Best Buy and American Express.
Starbucks also hit a 52-week high. Late last week, the company raised its 2010 forecast and said store traffic is getting better.
Homebuilders also saw their stocks moving higher. Beazer Homes jumped nearly 9 percent after that company reported its first profit in more than a year. The company said low prices, low mortgage rates and the first time buyer tax credit helped. Toll Brothers also said it saw improvement in an after the bell release, and its stock moved higher in late trading.
Aside from individual stock stories, it was a quiet day in the equities market Tuesday. The dollar moved off its 15-month low and the euro dipped. Oil fell $0.38 per barrel to $79.05 as the threat from Ida faded and the dollar strengthened. Gold continued its climb, closing at $1,102.50 an ounce, a new high.
Bonds weakened after Tuesday's 10-year auction, and that market is closed Wednesday for Veterans Day. Stocks will be open for trading though, and traders are expecting another slow day. "There's just nothing going on. It's very quiet. The VIX is back down to 23. It's just slowly plodding, and people want the year to end. They'd love if it ended tomorrow," said Todd Leone of Cowen.
But he doesn't think the market gives up on its move higher. "1120 is the 50 percent retracement in the S and P, from the high to low.. I think we can keep on going," Leone said.
What Else To Watch
Applied Materialsand Computer Sciencesreport after the bell.
Treasury Secretary Tim Geithner visits Japan to meet with senior government officials ahead of the Nov. 12 APEC finance ministers meeting in Singapore.
— Questions? Comments? marketinsider@cnbc.
More From CNBC.com