WORLD> America
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WORLD> America
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Rush of US economic data likely to shape week
(Agencies)
Updated: 2008-11-03 10:08 NEW YORK -- Wall Street's steep gains in the final days of October are leaving some investors optimistic that the market has put its scariest days behind it, but they're still wary about the landmines that could send stocks reeling again.
Tuesday's presidential election could help erase some unknowns over how the power structure in Washington will affect investors, but pressing economic questions could ultimately shape the week. Reports due on manufacturing, the service sector and, most important, employment, could determine whether the market stays above its mid-October lows and holds on to some stability or plumbs new depths. Sunday evening, stock index futures signaled a moderately lower open. Dow Jones industrial average futures fell 31, or 0.33 percent, to 9,267. Standard & Poor's 500 futures fell 4.30, or 0.44 percent, to 963.00 and Nasdaq-100 futures fell 4.00, or 0.30 percent, to 1,333. The market's volatility in September and October, however, has made futures a less reliable indicator of how the market will indeed open. Some analysts believe Wall Street's wild ride is not yet over. "There is a saying that bear markets end in exhaustion," said Axel Merk, portfolio manager at Merk Funds, suggesting the market doesn't appear at that point. He notes that day traders who profit from the dizzying turns in the market have not yet been forced out, a sign that stocks could continue to bounce around and see more late-day selloffs. To carve out a sustained advance, Wall Street will need to look past dispiriting signposts about the economy, he said. "If the market reacts positively to bad news that would be a very positive sign," Merk said, noting that Wall Street will have to grow numb to a chorus of downbeat reports about the economy and advance to make clear it is looking toward a recovery. Last week, investors did manage to write off some weak readings on personal spending and consumer confidence. There are other positives emerging, Merk and other analysts note: Some sources of selling pressure are easing as nervous investors abandon the market and because Friday marked the end to the fiscal year for mutual funds whose selling for tax reasons weighed on the market. The chief worry that set off the market's year-old decline, the housing market, remains, Merk noted. "We haven't seen the bottom yet in the housing market and ultimately that's the problem and if the housing market continues to slide, banks will need another round of capital," he said, referring to government money that last week began flowing to some banks. Washington is now mulling ideas to help prevent millions of homeowners avoid foreclosure but any plan is likely to be contentious. |
