Wall Street might search for motivation this week

[February 16, 2009]  NEW YORK (AP) -- The stock market doesn't have much to hang its hat on.

With the stream of corporate earnings reports waning and President Barack 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 on 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 percent for the week, while the Dow Jones industrial average lost 5.2 percent.

"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 Monday for Presidents Day. On Tuesday, Obama plans to sign the stimulus bill in Denver. He is then scheduled to outline his mortgage-rescue proposal on Wednesday.

Also this week, General Motors Corp. and Chrysler LLC 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 another $4 billion if the Treasury Department signs off on its viability plan. Chrysler has borrowed $4 billion and is seeking another $3 billion.

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 on 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.

Most earnings reports from the final quarter of 2008 have been weak but that shouldn't come as surprise given the difficult recession, analysts say. They contend the markets eventually will look beyond the bad news to a recovery.

"I am hearing so many negative voices that if I were a consumer I would be frightened more than reality," said Georges Ugeux, chairman and chief executive of Galileo Global Advisors in New York.

"You just have to look at the facts and you say 'OK, OK, it's not as bad as it used to be,'" he said, pointing to increased debt issuance by companies and easing demand for the safest types of government debt since September and October.

Wall Street could get a better sense of where the economy stands in a speech Wednesday by Federal Reserve Chairman Ben Bernanke. He is scheduled to discuss the central bank's lending programs and its balance sheet.

Also on Wednesday, the Commerce Department is expected to release its report on housing starts for January. And the Fed is scheduled to report on industrial production for January.

On Thursday, the Labor Department is due to release weekly jobless claims figures. The department also is expected to report on prices at the wholesale level.

A similar report on prices paid by consumers is due Friday.

[Associated Press; By TIM PARADIS]

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