Wall Street heads into another turbulent week Monday with Congress still hammering out a bailout for automakers and investors digesting more data likely to show the economic malaise deepening.
Investors received no respite from worries about the economy over the weekend, with President-elect Barack Obama declaring Sunday that the situation is destined to get worse before it gets better. Major U.S. stock indexes fell last week after a series of economic reports left little indication that the recession was easing.
Chief among investors' economic worries during the next few days will be the fate of Ford Motor Co., General Motors Corp. and Chrysler. The three automakers are seeking $15 billion in short-term aid from Washington to stave off bankruptcies that would lead to a flood of job losses.
The aid might come in exchange for the resignations of top executives. Sen. Chris Dodd, a Connecticut Democrat who chairs the Banking Committee, said Sunday that Rick Wagoner, GM's chief executive, "has to move on." He also said Chrysler should give up its independence and be acquired by another company.
But the negative news might not actually send stocks plunging this week. There's a growing sense that disappointing corporate reports and economic data might give the government incentive to aid Detroit and lead to lower interest rates and even a new stimulus package.
Thomas J. Lee, a stock analyst at JPMorgan, said Wall Street already had factored in much of the negative news about the faltering economy and sluggish corporate profits. On Friday, the Dow Jones industrial average gained 259 points despite a Labor Department report that showed the nation lost more than half a million jobs last month.
"You're not going to have another big jobs report until January," Lee said. "Everything now is more or less confirming what we already know."
There will be no shortage of data this week. The Labor Department will issue its weekly report on unemployment Thursday, and the number of first-time claims is likely to be above 500,000 for a fourth straight week.
The Commerce Department will follow on Friday with its report on retail sales, a closely watched gauge considering that consumer spending drives more than two-thirds of the U.S. economy. The government is expected to report that sales fell in November for a fifth straight month, despite a surge of shoppers over Thanksgiving weekend.
