Stocks primed for more volatility

Investors will grapple with more turbulence surrounding Europes deepening debt problems next week and the prospect of another round of dismal data on the faltering US economy.More volatility is almost guaranteed after the top German official at the European Central Bank quit and rumours circulated throughout global markets that Greece will default this weekend. Greece later called the rumour market speculation designed to hurt the euro.Recent market trading patterns and options activity also suggest Augusts roller-coaster ride will keep apace throughout September.Juergen Starks sudden resignation from the ECB on Friday came after a conflict over the banks policy of buying government bonds to combat the euro zones debt crisis, raising questions about a program that has been a key market stabilizer in recent months.You can tie our stock market directly to European banks -- the problem they have is sovereign debt exposure, said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.In a light week for earnings with only electronics retailer Best Buy Co Inc and diversified manufacturer Pall Corp among S&P 500 companies set to report, investors will eye a batch of data for any clues the economy has regained its footing. Economic readings over the past two months have left little reason for optimism.But the euro zone, where a two-year sovereign debt crisis has unsettled investors worldwide, will be the real focus.De Gan noted the ECBs critical role in potentially solving the sovereign debt issue, highlighting the implications for global markets on any reports of internal turmoil.Europe matters right now -- the ECB resignation, Trichets keeping rates flat as opposed to outright cutting them, said Phil Orlando, chief equity market strategist, at Federated Investors, in New York. There are rumors I cant substantiate, but the rumors are still out there that this is the weekend Greece goes bust.So certainly, Europe is going to capture our attention, Orlando said.Data on tap for next week includes retail sales along with the consumer price and producer price indexes for August. Also expected are regional manufacturing surveys by the Philadelphia Federal Reserve Bank and by the New York Federal Reserve Bank, both of which showed contractions in factory activity last month.