As unemployment in the US edges above 10 per cent, anxious investors will look to earnings reports from retailers for signs of life in the beaten-up consumer.

Comments from Wal-Mart Stores as well as from a host of smaller stores, will be of vital importance to investors trying to judge the recovery's pace. "The best way of gaining an insight into the consumer is from hearing from the companies that sell to them," said Peter Boockvar, equity strategist at Miller Tabak and Company in New York.

Stocks are up 50 per cent since the lows in March, but the market has languished recently as investors try to determine the strength of the economic recovery.

"Fundamentals and valuation pretty much fully reflect reality so now we have to rely on liquidity, momentum and psychology to help guide the direction," said Jack Ablin, Chief Investment Officer at Harris Private Bank in Chicago.

Wal-Mart and Kohls Corporation are both expected to post on Thursday slightly better third-quarter earnings than a year ago. Wal-Mart should see earnings of 81 cents (Dh2.97) per share, compared with 77 cents a year earlier, said analysts.

Higher-end department stores probably will not fare as well as their discount cousins. What these companies say about the future will potentially overshadow profit figures. Top-line revenue performance will be key in judging to what extent business is creeping back.

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