U.S. stocks are likely to be volatile next week in trade thinned by the Thanksgiving holiday, with investors focused on an expanded look at the Federal Reserve's view of interest rates and the economy.

But even with the first publication of the Fed's expanded economic forecast on Tuesday, the market is not expected to establish any real trend.

Jeffrey Kleintop, chief market strategist at LPL Financial Services in Boston, said that in a holiday-shortened week with little economic data, investors will be in a waiting game.

It's hard to say what would drive off the market. It's also hard to say what would drive the market up, he said. We're waiting for economic data to take on a bigger role going forward.

Stock markets will be closed on Thursday for Thanksgiving and will close early on Friday at 1 p.m., which is expected to reduce trading activity and increase price volatility.

Lower volume and thinner markets make for a bigger move in prices, said Ernie Ankrim, chief investment strategist for Russell Investment Group in Tacoma, Washington. But it will almost be an insignificant week with respect to the long-term direction of the market.

The major U.S. stock indexes rose for the week, but they came off a bruising five days the week before when the Nasdaq posted its biggest point loss since the September 11, 2001, attacks.

Higher crude prices lifted shares of oil companies, such as Exxon Mobil Corp on Friday, but investors feared the housing slump could slow the economy and financial service stocks fell on concern mortgage-related losses could worsen.

The Dow Jones industrial average rose 66.74 points, or 0.51 percent, to close at 13,176.79 on Friday. The Standard & Poor's 500 Index gained 7.59 points, or 0.52 percent, to end at 1,458.74. The Nasdaq Composite Index added 18.73 points, or 0.72 percent, to finish at 2,637.24.

For the week, the Dow gained 1.03 percent, while the S&P 500 and the Nasdaq each ended up 0.35 percent.

The Federal Reserve on Tuesday, along with the release of the minutes of its October 30-31 meeting of the Federal Open Market Committee, will publish its new expanded economic forecast. The expanded outlook will offer more insight on the Fed's view of the economy and the likely path of interest rates.

Investors will be looking for any indication that the Fed will cut rates again because of a slowing economy or that in fact inflation is the bigger risk, Ankrim said.

The last time we left them they had a balanced view of risks of growth and price stability, he said.

Between now and the December meeting the questions are going to be is it the macro element that drives Fed policy toward longer views of inflation control or is it going to be short-term market concerns? he said.

Investors are concerned about the value of risky asset-backed securities and mortgage-related losses at so-called structured investment vehicles, and the exposure banks or mutual funds may have to the SIVs.

Because the pricing of many high-risk securities has become difficult, investor uncertainty is unlikely to dissipate until early 2008, Ankrim said.

Kleintop, of LPL Financial Services, said major market indexes will likely hover around current levels, with recent lows acting as a bottom, he said. But markets are poised to do better because since 1992, only one fourth-quarter has posted negative returns, in 2000.

Since the popping of the tech bubble bottomed out in 2002, the stock market has had a 5 percent to 9 percent correction every six months, he said. A new high is set in six weeks to eight weeks, he said.

Also next week, the National Association of Home Builders/Wells Fargo Housing Market index comes out on Monday. Analyst expect the index to fall to a new low of 17 from 18, a prior record low.

Housing data comes out on Tuesday. Housing starts are estimated to have fallen to a seasonally adjusted annual rate of 1.170 million, from a previous 1.191 million. Seasonally adjusted building permits are forecast to have fallen to an annualized 1.20 million, down from 1.261 million in September.

On Wednesday, the Reuters/University of Michigan Surveys of Consumers is expected to show a reading of 75 for November, down from last month's figure of 80.9. A reading released on November 9 showed consumer sentiment already had fallen to 75.

The earnings calendar will be thin next week. Among key companies to report results are computer and printer maker Hewlett-Packard Co and retailer Lowe's Companies Inc on Monday. Tuesday will feature day D.R. Horton Inc, the largest U.S. home builder, and discounter Target Corp.

Clothing chain Gap Inc releases results on Wednesday.

(Editing by Leslie Adler)