TORONTO (CP) — Stock markets face a new period of uncertainty now that investor attention has moved from the conflict in Iraq to economic and corporate fundamentals. ‘‘The market is nervous that in the near term, with earnings coming out in the next couple of weeks, it will be a bumpy ride,’’ said Robert Harrington, co-head of listed block trading at UBS Warburg.

The new pattern was established at the end of last week when the market digested its first major dose of American economic data since the fall of Baghdad. Indexes initially surged after the U.S. Commerce Department reported retail sales jumped 2.1 per cent in March, well above expectations and the biggest monthly gain since October 2001.

Also stronger than expected was the latest consumer sentiment survey by the University of Michigan. Its April index was 83.2, compared with 77.6 in March. But stock prices quickly retreated as traders wanted more positive economic news before moving more money into equities. The reaction was the same with the premier earnings report of the week.

Investors sent General Electric sharply higher after it reported Friday its first-quarter profit rose 20 per cent, met analyst expectations and reaffirmed its 2003 outlook. But its revenue was down one per cent and its stock closed down two cents at $27.36 US.

‘‘There’s a lot of uncertainties regarding how the world’s largest economy is going to perform following the Iraqi war,’’ said Jeff Cheah, market strategist at MMS. ‘‘The fiscal situation in the U.S. is not looking good.’’ And it’s not just the U.S. that has problems. The International Monetary Fund warned last week that world growth this year will slow to 3.2 per cent from 3.7 per cent. ‘‘Corporate earnings really depend on how healthy the global economy is going to be, so there’s a big question mark with that,’’ said Cheah.

The IMF also pointed out structural problems in Japan and Europe, and cited SARS as having a potentially sizable negative impact on the Asian economy, he noted. ‘‘So there are a lot of hurdles to overcome, and with profit margins being squeezed and earnings results looking fairly grim, stocks’ upside potential is still debatable.’’ The Toronto market has its own issues, although the Canadian economy is still stronger than its U.S. counterpart. Cheah noted that some of the recent strength seen on the exchange is attributable to minerals, including gold, and the energy sector.