Credit worries and concerns that the economy is slowing are likely to continue sending shock waves into the stock market in the week ahead. But any signs that the holiday shopping season will be stronger than expected could help confidence.
Housing data, the Fed's beige book on economic activity and consumer confidence are among the data points investors will be watching. The first glimpse at how retailers fared during the Thanksgiving weekend should be available early in the week, and a slate of retailers will report earnings.
As of Friday's close, the S&P 500, a broad index of major stocks, returned to positive territory for the year, up 1.58%. The Dow and the Nasdaq are up for the year to date by 4.16% and 7.51%, respectively.
In a sign that some retailers are weathering fears of an economic slowdown, shares of merchants including Macy's and Best Buy jumped during Friday's shortened trading day as bargain-hungry consumers stormed stores and shopping malls.
Credit Market Seizure
There was a certain level of hysteria around the financials and the credit markets in the past week, starting with a Goldman Sachs analyst report saying Citigroup could take more writedowns. Also, Freddie Mac reported a $2.3 billion loss and said it was looking to raise capital and that it may cut its dividend in half.
"This has been one of the most eventful weeks," Jeffrey Gundlach, chief investment officer of TCW Group, said just prior to the Thanksgiving holiday. "Freddie Mac and Fannie Mae were supposed to be helper outers, not be compounders of the problem."