After weeks of high volatility, Wall Street may find next week’s quiet macroeconomic calendar the perfect opportunity to regroup and plan for the final stretch of the dangerous year.
With no major announcements scheduled, “investors may have an opportunity to ... assess the damage that has been done through the last several weeks,” said Gina Martin, an analyst at Wachovia Securities.
For now, “a lot of investors are sitting on the sidelines and waiting to see how the market trades until the end of the year,” she said.
After a spectacular 18 percent rise over six sessions, Wall Street was hammered last week — once again in volatile trade — as the brutal reality of the rapidly accelerating financial crisis sank in.
The economic downturn rapidly overshadowed the euphoria over the election of Democratic Senator Barack Obama late on Tuesday as the 44th president of the US.
The “Obama effect” lasted only one day, as voters headed to the polls, lifting the markets in the biggest election day rally in history.
Unemployment worries drove the blue-chip Dow Jones Industrial Average down nearly 1,000 points in the next two days.
On Wednesday the ADP survey showed the private sector shed 157,000 jobs last month, far more than already pessimistic analysts had expected, and on Thursday investors braced for a grim October jobs report due from the US government on Friday.
Their fears were more than proved right. The US unemployment rate for last month rose to its highest level since 1994, official data showed on Friday, with analysts forecasting it to move even higher in Obama’s first year as president.
The US Labor Department said the jobless rate rose to 6.5 percent as the world’s largest economy shed 240,000 jobs during the month amid the credit squeeze and downturn.
For the first week of this month, the Dow fell 4 percent to 8,943.81 points, after gaining more than 11 percent in the previous week.
The NASDAQ dropped 4.27 percent to 1,647.40 and the broad Standard & Poor’s 500 ended 3.92 percent lower at 930.75.
The bond market renewed its safe-haven status. The yield on the 10-year Treasury bond fell to 3.780 percent from 3.970 percent last Friday and the 30-year Treasury bond slid to 4.261 percent from 4.369 percent.
In the week ahead, only the retail sales numbers on Friday were seen as having market-moving potential, analysts said, because of concerns that consumers’ growing unwillingness to spend will spell disaster for the all-important holiday shopping season.
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