9:15 am - Wall St. faces record losses in last week of 2008

NEW YORK (AP) - Investors are preparing to close out the last threetrading days of 2008 with Wall Street's worst performance since Herbert Hooverwas president. The ongoing recession and global economic shock pummeled stocks this year,with the Dow Jones industrial average slumping 36.2 percent. That's the biggestdrop since 1931 when the Great Depression sent stocks reeling 40.6 percent. The Standard & Poor's 500 index is set to record the biggest drop since itscreation in 1957. The index of America's biggest companies is down 40.9 percentfor the year. With these statistics ready to play out this week, it is little wonder whyinvestors are all too happy to close the books on 2008. Analysts are alreadylooking toward January as a crucial period for the market as it tries to recoversome of the $7.3 trillion wiped from the Dow Jones Wilshire 5000 index, thebroadest measure of U.S. stocks. "It is hard to gauge a recovery because there's so many things out therethat are interactive with each other," said Scott Fullman, director ofderivatives investment strategy for WJB Capital Group in New York. "Nothing isin a vacuum. Anybody who is managing money has to be on the cautious side for atleast the first six months of 2009." He said many analysts are jumping past this week and focusing on next month,especially with Barack Obama set to be sworn in as president on Jan. 20. Thereis hope that the new administration will deliver another stimulus package, whichalong with December's interest rate cuts, might help quell the financial crisis. Trading is expected to remain volatile with many market participants on thesidelines during the holiday-shortened week, but that doesn't mean investorswon't be kept busy. With no Santa Claus rally last week, economic data slatedfor the coming days could sway the market's mood going into 2009. Investors will be awaiting details about how retailers fared in thepost-Christmas sales period, especially since consumer spending drives more thantwo-thirds of the U.S. economy. The main question is if bargain prices at themalls will be enough to rescue retailers from a bleak holiday shopping season. Meanwhile, another gauge of how Americans feel about spending money will bereleased on Tuesday. The Conference Board will issue its December index ofconsumer confidence, which is expected to rise to a reading of 45.2 for thismonth, up slightly from 44.9 in November. The Labor Department will report on weekly jobless claims Wednesday, after a26-year high of 586,000 initial filings in the week ended Dec. 20. But the most anticipated economic data will be delivered Friday wheninvestors get a fresh reading on the manufacturing sector. The Institute forSupply Management releases its December survey of purchasing managers. The index is expected to show a reading of 35.5, down from November's 36.2,according to economists polled by Thomson Reuters. A reading above 50 points toexpansion, while a reading below 50 shows a contraction. There is little in the way of corporate news slated. Though, the final weekof the year -- when volume is slow and many money managers are on vacation -- isoften a time when companies slip through lower quarterly forecasts. Investors were still waiting word if GMAC Financial Services, the financingarm of General Motors Corp., will be eligible for a government bailout. GMACreceived the Federal Reserve's approval to become a bank holding company lastweek, but that was contingent on putting into place a complicateddebt-for-equity exchange by 11:59 p.m. EST Friday. That deadline passed with no word from the company. Analysts have speculatedthat if GMAC doesn't obtain financial help it would have to file for bankruptcyprotection or shut down, which would be a serious blow to parent GM's ownchances for survival. Both General Motors and Chrysler LLC on Monday will receive the first partof the $13.4 billion in emergency loans from the government. Each will receiveabout $4 billion, then receive the second payment of $5.4 billion on Jan. 16. GMgets a third installment of $4 billion on Feb. 17. Ford Motor Co. did not participate in the government rescue plan. IndyMac Bank, one of the most high-profile financial institutions to failbecause of the financial crisis, might be close to getting a new owner. Thebuyers include private equity firms J.C. Flowers & Co. and Dune CapitalManagement, according to The New York Times, which cited unidentified peopleclose to the matter. The proposed sale could be announced by Monday morning, the report said. Meanwhile, Kuwait's government on Sunday scrapped a $17.4 billion jointventure with U.S. petrochemical giant Dow Chemical Co. after criticism fromlawmakers that could have led to a political crisis in this small oil-richstate. The Cabinet, in a statement carried by the state-owned Kuwait News Agency,said the venture, was "very risky" in light of the global financial crisis andlow oil prices. Dow Chemical said it was "extremely disappointed" with theKuwaiti government's decision and was evaluating its options under thejoint-venture agreement.