The new-home sales report for October is due at 10 a.m. U.S. Eastern Time. Sales of new single-family homes rose to the highest rate in more than two years in September, and economists anticipate demand and lean inventories will maintain that level.

"We're expecting a reasonable in-line number, given what we've seen on the economic front," said Stephen Pope, managing partner at Spotlight Ideas, referring to a better-than-expected batch of data out the prior day.

"It's almost as though the economy is looking after itself because at the moment we have to focus on the fiscal cliff," he said.

Also, at 2 p.m. Eastern, the Fed will release its Beige Book summary of regional economic conditions, which is expected to say growth continued at a modest clip with the labor market little changed. Economists will be looking for comments about the effect of Hurricane Sandy, along with impacts of the fiscal cliff.

Mr. Pope said the market may have overreacted to Senate Majority Leader Harry Reid, who triggered selling on Wall Street on Tuesday when he said little progress has been made on avoiding the so-called fiscal cliff.

Down 1% for the week so far, the Dow Jones Industrial Average fell 89.24 points, or 0.7%, to end at 12878.13 on Tuesday.

"I can't believe anyone really believes that in the first serious get-together postelection, anyone will walk out and say, 'You know what guys, we agree on everything,'" said Mr. Pope. "I think this is the first salvo, and people are trying to position themselves for the most advantageous position."

"I think you're going to see, going forward from here, a repetition of yesterday, with people making grandstanding statements—a bit like how it's gone in Europe—and trying to flex their muscles," he said.

He said markets will get a boost as soon as investors get two or three days of more constructive comments from politicians. "Particularly as December wears on, trading will thin out and markets will get the benefit of window-dressing, which could push the Dow closer to 13000,"