As unemployment in the United States edges above 10 percent, anxious investors will look to earnings reports from major retailers for signs of life in the beaten-up consumer.

Comments from Wal-Mart Stores Inc , the world's largest retailer, 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 & Co in New York.

Stocks are up 50 percent 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.

Unsurprisingly, discount retailers are expected to do better. Wal-Mart and Kohls Corp are both expected to post slightly better third-quarter earnings than a year ago.

Wal-Mart should see earnings of 81 cents per share, compared with 77 cents a year earlier, when it reports results on Thursday, according to analysts polled by Thomson Reuters.

Kohls also will give its quarterly scorecard on Thursday.

Higher-end department stores probably won't fare as well as their discount cousins. Macy's Inc is expected to see third-quarter losses widen on Wednesday and JC Penney's profit is likely to be down sharply when it reports results on Friday.

What these companies, and especially Wal-Mart, 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.

October retail chain sales showed half of retailers fell short of Wall Street's expectations -- another blow for hopes of a widespread recovery for the holiday season.

People know that global growth is definitely improving, but the U.S. consumer still remains stretched, Boockvar said.

WHAT'S $81 BILLION AMONG FRIENDS?

November's record U.S. Treasury debt refunding during the week is a reminder of the cost of economic recovery and the toll on consumers as the U.S. dollar remains under pressure. Recent auctions have been strong, but any sign that appetite for the debt is waning could ruffle markets.

Three Treasury auctions are scheduled next week to refinance U.S. government debt in a record $81 billion November refunding. Last month signaled the end of the Federal Reserve's Treasury purchase program, removing one element of demand.

This is going to be an auction where the Fed can't participate. They've run out of their $300 billion limit. We'll have to see how demand steps up on its own, Ablin said.

After giving some hints to help financial markets gauge how long they will keep interest rates ultra-low, Fed officials will hit the lecture circuit during the week to offer their views on the economic outlook.

Fed Governor Daniel Tarullo will speak on financial regulation on Monday. He will be followed by five regional Fed bank presidents throughout the week. All are likely to face questions on the economy.

TRADE GAP AND CONSUMER SENTIMENT

The menu of economic indicators will be relatively light after the past week's huge helpings of data.

Friday the 13th is the day to note, when the U.S. international trade deficit for September will be released, along with October's import and export prices. The first reading for November on consumer sentiment will also be given that day by the Reuters/University of Michigan Surveys of Consumers.

The September trade gap is expected to edge up to $31.60 billion from $30.71 billion the previous month, according to economists polled by Thomson Reuters.

Import and export prices in October are also like to have increased, the Reuters poll showed. Import prices are projected to have gained 1 percent in October, following a tiny rise of 0.1 percent in the previous month. October export prices are forecast to have risen 0.2 percent, following a decline of 0.3 percent in the previous month.

The Reuters/University of Michigan consumer sentiment index for November is forecast at 71.0, up slightly from October's final reading of 70.6.

(Reporting by Edward Krudy; Editing by Jan Paschal)

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