The Federal Reserve came to the stock market’s rescue on Friday but unless credit markets remain stable next week, the salvation may prove little more than a brief respite from its late summer sell-off.

“It restores confidence, but we’re not out of the woods yet,” said Bill Hoskins, managing director of fixed-income research at Mellon Capital Management, in San Franscisco.

In a surprise before the market’s open on Friday, the Fed cut the discount rate on its loans to banks to 5.75% from 6.25%. The fed funds rate on interbank loans was left at 5.25%.

Hoskins said the Fed has created a safety net that makes it possible for banks to lend to credit-worthy borrowers. But he also said financial institutions remain leery about lending to one another after the blowup in subprime mortgages. Subprime loans are the lowest tier of the mortgage market where borrowers received loans despite poor credit histories.

If investors are looking past faltering credit markets for cues on what to do next, the week offers only a few pieces of economic data and a very thin calendar of corporate earnings. Stocks, which erased nearly all of a 300-point decline in the Dow industrials in the final hour of Thursday’s trading, rocketed higher on Friday after the Fed’s move.

But the rally on Friday was not enough to prevent the major indexes from finishing with losses for the week. The Dow Jones industrial average ended the week down 1.2%, the Standard & Poor’s 500 index fell 0.5% and the Nasdaq composite index declined 1.6%.

For the year, though, all three US stock indexes are still higher. The Dow is up 4.9%, the S&P is up almost 2% and the Nasdaq is up 3.7%. Friday’s surge helped the S&P recover from the previous two days, when the broad index had given up all its gains for the year. Investors will obviously start the new week hoping that Friday’s rebound will hold.

“I’m expecting some follow-through on the upside,” said Ralph Acampora, chart analyst and director of research at Knight Capital Group in Jersey City, New Jersey. Acampora noted that the decline reached the point of a 10% pullback from all-time highs in the major indexes, in technical parlance a “correction” that washes out excesses. Secondary indexes had an even steeper pullback.

“I’m not looking for it to be huge by any means, but I think we’ll get a little more out of it,” Acampora said of the continued rally that he expects. But he warned that the subprime problems have “tentacles” that extend very far.

Countrywide Financial Corp shares soared on Friday after six days of declines that brought the stock to its lowest point in nearly four years. Countrywide is the largest US mortgage lender.

Giri Cherukuri, head trader at OakBrook Investments in Lisle, Illinois, said volatile days lie ahead. “I think there will be more of the same in terms of volatility,” Cherukuri said. “People are still trying to figure out what companies are exposed, and to what degree, in terms of financial companies. I think that’s the big focus,”

One key piece of data does not come until Friday, when the Commerce Department reports on new home sales for July. Sales last month likely remained in a slump at an annual rate of 820,000 homes, down from 834,000 in June, according to the median forecast in a Reuters poll of economists.

On the same day, the markets get a report on durable goods orders for July. Economists expect a 1.0% increase following a 1.3% rise in June. The week’s data includes the Conference Board Index of Leading Economic Indicators, which is expected to rise 0.4% after a decline of 0.3% in June. That report comes on Monday.

The week’s list of companies reporting corporate earnings is also short, with retailers in the majority. Home improvement chain Lowe’s Inc releases results on Monday. Analysts expect a small increase from a year ago. The report will get special attention because of the company’s involvement in housing, and also because rival Home Depot Inc recently reported a 15% drop in profit.

Discount chain Target Corp reports on Tuesday. Rival Wal-Mart Stores recently posted earnings that were higher than a year ago but beneath Wall Street’s estimates. Other retailers reporting earnings are Abercrombie & Fitch Co, Limited Brands, Gap and Staples.

Outside of the retailing arena, reports are due from medical device maker Medtronic Inc on Tuesday and food company H.J. Heinz Co on Friday. Heinz said on August 15 that its profit would exceed Wall Street’s forecasts.