Wall Street's Last Full Week Of '08 Is A Big One

[Dover]

Wall Street headed into the weekend with storm clouds over the Detroit automaker bailout and more turmoil looming, but investors nonetheless had a slightly positive week to celebrate.

Friday's session had a rocky start after a $14.0 billion automaker rescue plan was shot down in the Senate late Thursday. The failure of the bill, which would have sent sorely needed funds to General Motors (nyse: GM - news - people ) and Chrysler, may lead the Treasury to tap its Troubled Asset Relief Program for the money. (See "Bush May Roll Out TARP For Detroit.")

Some type of action is expected by the time trading reopens Monday, for what will be the last full trading week of 2008. Markets are closed on Christmas Day and New Year's Day, and investors will not be the least bit sorry to see the calendar turn to 2009. So far this year the Dow Jones industrial average is down 34.9%; the S&P is 40.1% lower; and the Nasdaq is off 41.9%. On Friday, the Dow gained 65 points, or 0.8%, to 8,630, trimming its loss for the week to a negligible 5 points. The S&P 500 added 6 points, or 0.7%, to finish at 880 and lock in a 0.4% weekly gain; while the Nasdaq climbed 33 points, or 2.2%, to end the day at 1,541 and build 2.1% over five days.

Aside from the automotive sector, financials highlight the week ahead, with fourth-quarter earnings reports due from Wall Street banks Goldman Sachs (nyse: GS - news - people ) and Morgan Stanley (nyse: MS - news - people ). The last reports from the erstwhile brokerage houses came right around the time two of its rivals went up in smoke; Lehman Brothers (nyse: LEHMQ - news - people ) by bankruptcy and Merrill Lynch (nyse: MER - news - people ) via its sale to Bank of America (nyse: BAC - news - people ). Both firms have received TARP money since then, but their earnings are likely to be ugly...>

http://www.forbes.com/markets/2008/12/13/briefing-outlook-fed-markets-econ-cx_ss_1212markets34.html?partner=contextstory