Washington's bid to put finishing touches on healthcare reform this weekend should help lift uncertainty on Wall Street, but there may be some turbulence along the way this week as the recent rally appears to be fraying.
Democratic leaders in the US House of Representatives pushed undecided members for support and voiced growing confidence on Friday they will win a close vote on final passage of a bill that needs a sweeping overhaul of the country's healthcare system.
The House will vote today on President Barack Obama's top domestic priority, which has picked up momentum in recent days with backing from former opponents.
Shares of healthcare insurers, who have been criticised by Obama in recent weeks, could rally if the vote helps remove the uncertainty about their profit outlook, analysts say.
"The market doesn't like indecision. Whichever way it goes, there will be a decision and then people can move on," said Neil Catania, floor broker at MND Partners in New York.
"If the bill passes, you'll have a majority of people putting some money to work. It's a mixed bag, though, because what's good on one side is going to hurt another side. But more important than anything is the decision."
The Morgan Stanley Healthcare Payor Index capped its biggest five-day run-up in three months on Friday as investors bet that their prospects might end up not being as adversely affected as previously feared. But improving sentiment over healthcare just might not be enough to overcome anxiety that is now buffeting the market as investors look for fresh catalysts to push ahead a year-long rally in US stocks.
This week, housing will be another dominant theme with the release of February existing home sales on Tuesday and a report on February new home sales on Wednesday.