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THE WEEK AHEAD

Investors to seek fresh clues about the economy

February 16, 2009|Associated Press

The stock market doesn't have much to hang its hat on.

With the stream of corporate earnings reports waning and President Obama preparing to sign the $787-billion stimulus package, investors this week will be looking for fresh clues about the economy.

Wall Street has been busy focusing on companies' quarterly numbers and the developments in Washington. Now, investors are faced with finding less obvious answers to the question "What's next?"

Any jitters about what might be the next major bit of news to drive the market could extend the back-and-forth trading seen in the nearly three months since the Standard & Poor's 500 index finished at an 11-year low Nov. 20.

Stocks fell sharply last week to end at their lowest levels since November as investors factored in the stimulus bill and looked to other uncertainties about the economy. The benchmark S&P 500 ended down 4.8% for the week, while the Dow Jones industrial average lost 5.2%.

"This whole process has been a market-bottoming process. It takes time," said Harry Clark, president and chief executive at Clark Capital Management in Philadelphia.

Clark and other market experts say it remains unclear whether the late-November levels will hold as the bottom of the market's pullback from its October 2007 highs.

U.S. markets are closed today for Presidents Day. On Tuesday, Obama plans to sign the stimulus bill in Denver. He is then scheduled to outline his mortgage-rescue proposal Wednesday.

Also this week, General Motors Corp. and Chrysler are expected to submit plans to the government to meet a Tuesday deadline for showing how they can repay billions in loans and become viable, even as automobile sales are falling.

GM already has borrowed $9.4 billion and would receive an additional $4 billion if the Treasury Department signs off on its viability plan.

Chrysler has borrowed $4 billion and is seeking $3 billion more.

Investors are worried one or more of the companies could have to declare bankruptcy if they don't win additional financing. Ford Motor Co. is the only one of the Detroit automakers not taking government loans.

Wall Street also will be looking at a few quarterly reports from retailers and other companies. Wal-Mart Stores Inc. is set to report results Tuesday before the market opens.

Investors have relied on the world's largest retailer as a safe bet in a weak economy because it can attract customers looking for discounts on necessities.

Investors also will be eager for the company's assessment of the economy.

Earnings are also due this week from cable TV operator Comcast Corp., farm-equipment maker Deere & Co., Goodyear Tire & Rubber Co., Hewlett-Packard Co., J.C. Penney Co., and Sprint Nextel Corp.

Wall Street could get a better sense of where the economy stands in a speech Wednesday by Federal Reserve Chairman Ben S. Bernanke.

He is scheduled to discuss the central bank's lending programs and its balance sheet.

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At a glance

TODAY

Presidents Day holiday.

Financial markets are closed.

TUESDAY

Quarterly earnings reports are due from Wal-Mart Stores, Arbitron and Medtronic.

WEDNESDAY

Commerce Department releases housing starts for January.

Federal Reserve releases industrial production for January.

Federal Open Market Committee releases minutes from meeting held in January.

Earnings reports are due from Hewlett-Packard, CBS, Goodyear Tire & Rubber and Whole Foods Market.

THURSDAY

Labor Department releases weekly jobless claims and the producer price index for January.

Freddie Mac releases weekly mortgage rates.

The Conference Board releases leading economic indicators for January.

Quarterly earnings reports are due from CVS Caremark, Newmont Mining and Sprint Nextel.

FRIDAY

Labor Department releases consumer price index for January.

Quarterly earnings reports are due from J.C. Penney and Lowe's.

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