KEY POINTS:
Any new signs that the US economy is continuing to slow down will make it hard for stocks to regain their footing after a bruising week that saw market indexes down sharply, and left consumer confidence at a two-year low.
Monthly data from the Commerce Department, due on Thursday, are expected to show retail sales rose 0.2 per cent last month, according to the consensus forecast of economists polled by Reuters.
That would represent a slower pace from the 0.6 per cent increase in September, which was bolstered by fuel sales.
Thursday also brings the US Producer Price Index for last month from the Labour Department. The consensus forecast is for an increase of 0.3 per cent in overall PPI and a 0.2 per cent gain in core PPI, which factors out volatile food and energy prices.
A month earlier, overall PPI rose 1.1 per cent, while core PPI added just 0.1 per cent.
On Friday, the Labour Department releases October data on consumer prices. The overall Consumer Price Index is expected to rise 0.3 per cent and core CPI is forecast to gain 0.2 per cent.
Both the producer and consumer price indexes will be studied for clues on whether core inflation is tame enough to let the Federal Reserve cut interest rates once more at its meeting next month.
The US consumer is evidently showing the strain of falling home prices and rising energy costs.
At the weekend the Reuters/University of Michigan Surveys of Consumers reported that its index of consumer sentiment slid early this month to 75.0, its lowest in two years.
Last week, the Dow Jones industrial average lost about 4.1 per cent and the Standard & Poor's 500 Index fell 3.7 per cent. The Nasdaq Composite Index dropped 6.5 per cent.
For the year so far, though, all three major US stock indexes are still in positive territory. The blue-chip Dow average is up 4.7 per cent this year, the S&P 500 is up 2.5 per cent and the Nasdaq, despite its sharp decline last week, is still up 8.8 per cent for the year.
With companies such as tech bellwether Cisco Systems citing a significant decrease in orders from banks, concern about credit problems spreading throughout the economy has grown.
"The impact of the credit crunch is just starting to be felt," said Marc Heilweil, president of Spectrum Advisory Services in Atlanta. "As [Fed chairman Ben] Bernanke said, there is going to be very little growth in the fourth quarter."
- Reuters
