Stocks’ wild ride should continue this week

As people lose their jobs and watch their homes and nest eggs plunge in value, they are spending much less — a problem for the broader economy because it is driven primarily by consumer spending. Commerce Department said last week retail sales decreased by 2.8 percent in October, the largest amount on record, exceeding the 2.65 percent drop in November 2001.

That will make investors uneasy about another round of earnings data this week, as Lowe's Cos., Target Corp. and Home Depot Inc. are among the companies scheduled to report. Computer maker Dell Inc.'s report could also provide some insight into how much the consumer is willing to spend on discretionary items.

With consumers and businesses alike pulling back their spending, companies across a range of industries are vulnerable. So far, 93 percent of S&P 500 companies have reported third-quarter earnings, and on average, they saw a 19 percent decline in earnings, according to data complied by J.P. Morgan. The biggest losers were the financials, and the biggest gainers were energy companies — a sector that could weaken as oil prices tumble.

Meanwhile, demand in the credit markets remains at a trickle. Government efforts to prop up the global financial system have helped improve the functionality of the markets, but have done little to draw investors, who are worried about a protracted economic downturn.

AP New home sales drop as recovery teeters   The housing market is in the midst of a rocky recovery, but it’s too soon to declare the end of one of the worst slides since the Great Depression. New home sales fall to lowest level since March Incomes rise at fastest pace in six months Home sales surge, boosting recovery hopes Advocates want more for black unemployed

"We've seen some thawing, but we have not seen a resumption of buying into the credit markets," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York.

And with Congress in lame duck mode heading into the holidays, "there's going to be incredible reluctance by lawmakers to make controversial legislation," said Daniel Alpert, managing director at the investment bank Westwood Capital. He said some "bold moves" need to be taken to address the huge amounts of mortgages and other debt headed for default.

Leaders from members of the Group of 20 nations met in Washington Friday and Saturday, but made no concrete plans to try to resolve the global financial crisis, although they did pledge to keep providing loans to financial institutions.

The leaders also agreed to reform the International Monetary Fund and the World Bank to give developing nations a stronger say, and to refrain from erecting trade barriers for the next 12 months.

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