Week of 8/23/10 Drivers of markets: Economy? M&A? Earnings?

This coming week will provide new economic data points:  existing home sales on Tues., durable goods orders on Wed., and GDP figures on Friday. Recent data from the economy has been lukewarm while corporate earnings were healthy. Would the economy improve as corporations spend their cash hordes to invest in new businesses and hire more employees or would they use their cash to buy other companies through M&A.? What are the implications for the financial markets?