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Stocks could be volatile but not in correction yet

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Week Ahead: Wall Street's crystal ball is fogged

The tug of war between better economic news and the potential for rising interest rates could continue to simmer in the background in the week ahead, keeping stocks volatile.

Traders will also focus on the whole list of situations that have been unnerving markets, including Europe's economy, Argentina's default, tensions between Russia and Ukraine and the Israeli incursion into Gaza. The overriding concern, however, had been the idea that the Fed could move to raise rates sooner than expected, fueled in the past week by stronger 4 percent second-quarter GDP growth and the first signs of higher wages and inflation in second-quarter data.

Meanwhile, news on Sunday that Portugal will spend 4.9 billion euros ($6.58 billion) to rescue its largest listed bank Banco Espirito Santo is helping U.S. stock futures higher.

Strategists broadly don't see a deep selloff, even with the Dow's 2.8 percent decline in the past week that erased the its gains for the year. The fell 2.7 percent to 1,925, in its worst weekly performance in two years, and it is now 3.3 percent off the high it set on July 24.