Don't expect Wall Street's turmoil to ebb in the year's last full week of trading as investors face questions about an auto bailout, the banking crisis, and the Federal Reserve's final rate-setting meeting of 2008.
The market, still hovering at decade lows, has yet to show any sign of a traditional year-end rally. And the next few days it will face a number of tests that could determine if investors are able to get past all the negative economic news to end the year on a bright note.
The fate of Detroit's three biggest automakers continues to be in question this week after the Senate failed to pass a $14 billion bailout for the Chrysler LLC and General Motors Corp. Ford Motor Co. has said in the past that it does not need government money to survive.
The White House this week is expected to unveil ways to provide emergency aid to the automakers, which have said they could run out of cash within weeks without government help. Many expect that the Bush administration will use money from the $700 billion financial bailout fund to provide loans to the carmakers.
"If the administration had some notion that this was a house of cards, that this was going to bring the entire economy down, then they have the authority to write checks out of the already passed bailout program," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.
Wall Street put on another impressive show of resilience Friday, rebounding from an early sell-off to end higher after the government said it would assist troubled U.S. automakers. The Dow Jones industrial average rose 0.75 percent, and ended the week with a loss of just 0.07 percent.
The S&P 500 rose 0.42 percent last week, while the Nasdaq advanced 2.08 percent. For the year, the Dow is down 34.9 percent, the S&P 500 is down 40.1 percent and the Nasdaq is off 41.9 percent.
"The market's been pretty resilient," said Matt King, chief investment officer of Bell Investment Advisors. "The bad news keeps coming out ... but the market's been holding firm and making some good gains. So to us that's a good sign."
Along with uncertainty about the auto sector, the Fed's policy meeting on Monday and Tuesday will also remain in focus. The central bank is expected to lower its benchmark fed funds rate by a half-percentage point to 0.5 percent.
But, with rates so low, that means the Fed will soon run out of room to lower interest rates further to stimulate the economy.
Goldman Sachs Group Inc. and Morgan Stanley, the two biggest U.S. investment banks, will report results this week.
Analysts expect Goldman on Tuesday will report its first loss since becoming a public company in 1999. Morgan Stanley is also expected to report a loss during the fourth quarter.
Investors will also pore over economic reports, including Tuesday's release of the government's Consumer Price Index for November and housing starts.