Is the stock market turning bearish? Watch Friday's jobs report.

Even though the stock market finally broke its eight-session losing streak, investors are starting to wonder if the stock market is such a good deal.

On Wednesday, after being down most of the day, the Dow Jones Industrial Average finally managed to pick up 29.82 points by the closing bell. Despite the gain, the Dow is down about 7 percent over the last nine trading sessions. As a result, stock advisors describe investors as “very nervous.”

Initially, many investors were shaken by Congress's game of chicken over the national debt ceiling. Then, after several days of glum economic news, they became more concerned. Now, many are beginning to question whether the stock market – up about 5,300 points from the Dow's March 2009 lows – is still the place to have their money.

“It’s a very fair question,” says Mark Lamkin, CEO of Lamkin Wealth Management in Louisville, Ky. “We had a really nice bull market but I think the market may have rebounded a little ahead of itself.”

Mr. Lamkin believes a key test for the stock market will come on Friday, when the government reports the July jobs and unemployment numbers.

“I can’t remember a more important jobs report,” says Lamkin. “If they pop to 200,000 or better, the market will rally fiercely,” he says. “But, if they are 50,000 or less, we could shave 300 to 400 points off the Dow. And, if they come out as a gain of 90,000 to 110,000 – right below analysts’ expectations – we will have a sideways pattern.”

Many investors remain committed to the stock market because corporate earnings remain strong.

“There is no indication companies will not continue to do relatively well,” says Frank Fantozzi, chief investment strategist for Planned Financial Services, a Cleveland-based money manager. “Companies' earnings are still very solid.”

Mr. Fantozzi believes the stock market is facing “strong headwinds,” but not yet anything to sink it. He thinks it will take a week or so for the markets to rebound from the trauma of watching Congress struggle with the debt ceiling. “Once we start to stabilize, I think we’ll finish the year with a gain of 7 percent to 9 percent for the year,” he says.

Not everyone is so optimistic.

The stock market’s slide south could continue even further, says Andre Weisbrod, president of STAAR Financial Advisors in Pittsburgh, Pa.

He says a 10 percent drop in stock prices is normal after such a large run-up. In fact, he considers the most recent drop “a pause” consistent with other pauses in prior bull markets.

If the market dips a little more, he will look for bargains, Mr. Weisbrod says. “I have a lot of stuff I’d like to buy.”

But if the stock market continues to fall, dropping some 15 to 20 percent, “then the stock market is telling you something,” he says.

In the past, however, stock markets have predicted recessions that never happened. “It seems like once or twice a year we go through dips that suggest an expansion is failing,” says Fred Dickson, chief investment strategist at D.A. Davidson & Co. in Lake Oswego, Ore.

Mr. Dickson recalls a market slide back in 2004, during the Clinton presidency, when the Federal Reserve tightened interest rates to cool the economy.

“The stock market fell but there was no recession,” he remembers.

Now, Dickson thinks the market is giving “a low but increasing probability of a recession.” But, Dickson says those concerns will dissipate at year end as business races to take advantage of a tax credit for new investments that expires at the end of the year. This will lead to renewed growth, he predicts.