Wall Street braces for another pivotal week

Obama’s news conference might also provide details about some of his plans to help right the economy.

Over the weekend, Obama’s top aides said he wants the new Congress to approve massive spending and fresh tax cuts in January, probably far distancing a $175 billion campaign proposal, so he can sign it after taking office. He also outlined the framework of a plan to save or create 2.5 million jobs by the end of 2010.

Obama could also face questions about what should be done about Ford Motor Co., Chrysler LLC, and General Motors Corp. Congress postponed debates on aid to the automakers, and that caused even more fears about how steep the U.S. recession would be if one of those companies were to go bust.

There are also concerns about the fate of Citigroup, the leading U.S. financial services company whose stock price has been halved because of a crisis of confidence in its future. Citi has seen its market value plunge to about $21 billion on Friday from more than $270 billion at the end of 2006.

The company’s board met Friday to discuss the situation, and management maintains that it is adequately capitalized and doesn’t plan to break up the company. On Sunday, the Treasury Department and the Federal Reserve was weighing a plan to stabilize Citigroup, according to people familiar with the talks. They spoke on condition of anonymity because the discussions were ongoing.

One option being considered is taking some of the risky assets held by Citigroup off its balance sheet, a move that would give the company more breathing room and put it in a better position to raise capital. It was unclear, however, exactly how that option might be structured, the people said.

A spokesman for New York-based Citigroup declined comment.

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Investors are also expected to pay close attention to a number of economic reports due to be released during the week, including readings on existing and new home sales for October, and weekly U.S. jobless claims data. But the most-watched reports are those focused on consumers, whose spending drives more than two-thirds of the U.S. economy.

Wall Street will again look to Black Friday, the day after Thanksgiving that kicks off the holiday shopping season. The day, typically the busiest shopping day of the year, is used as a gauge for consumer spending.

There are also a number of retailers that will report quarterly results, including Tiffany and Co., Talbots Inc., American Eagle Outfitters Inc., and Dollar Tree Inc.

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