AFTER the best first quarter in 14 years, the S&P 500 may be poised for a pullback as investors look to a slew of economic data for insight on the strength of the domestic economy.

The Dow and the S&P 500 closed out their best first quarter since 1998 and the Nasdaq had its best first-quarter performance since 1991, largely on the back of improving domestic economic data.

Economic indicators this week include data on manufacturing and services from the Institute for Supply Management, construction spending, factory orders and domestic car sales as well as several reports on the labour market, culminating in Friday’s payrolls number.

The benchmark S&P 500 index could be vulnerable to a retreat if the data shows a softening of the economy, a possibility many investors have been cautiously eyeing with the index up nearly 30 per cent from its October low.

“The remarkable part of the first quarter is you really didn’t have any major piece of economic data in the US that disappointed the market,” said Dean Junkans, chief investment officer of Wells Fargo Advisors and Wells Fargo Private Bank in Minneapolis.

“It was really a no drama, no surprise quarter and the market may not be fully appreciating that we could have some surprises here in some of the data coming up.”

Equity markets will be closed at the end of the week for the Good Friday holiday, which could create lighter volume and increase volatility. The holiday also conflicts with the release of the March payrolls report, which could leave investors reticent to make big bets before the data.

Economists polled by Reuters are looking for an addition of 201,000 jobs in March, compared with February’s 227,000. They expect the US unemployment rate to remain steady at 8.3 per cent.

“People are looking for a little more out of the data, but it ultimately depends on how the numbers come in relative to expectations – it’s all about beating or missing expectations,” said Joseph Tanious, market strategist at JP Morgan Funds in New York.

“That will likely dictate the market the following Monday after Good Friday."

Along with dealing with a short week and a glut of economic data, investors will have to grapple with tomorrow’s release of the minutes from the most recent Federal Open Market Committee meeting and an interest-rate decision on Wednesday by the European Central Bank after its meeting.

“The underlying issue in Europe – the sovereigns themselves being solvent – has not been resolved,” Tanious said. “I would suspect you will continue to see some flare-ups in Europe that will rattle markets here in the US.” The ECB is expected to keep interest rates unchanged with no major announcements on other policy decisions.