Wall St Week Ahead: For stocks, high anxiety remains

By Leah Schnurr

NEW YORK, Oct 10 (Reuters) - High anxiety on Wall Street won't subside next week as the deepening credit crunch pushes the global economy into recession and corporate profits increasingly become an afterthought as investors scramble to raise enough cash to weather the credit crisis.

On the heels of a panic-riddled sell-off that caused the Dow industrials and the S&P 500 to plummet for eight days in a row, finance ministers and central bankers from the Group of Seven meet this weekend to discuss jammed credit markets and the staggering global economy.

While corporate earnings season gets into full swing next week, results will likely be on the back burner as investors struggle to see through the fog of negative psychology that has engulfed the market.

Among financial institutions, JPMorgan Chase & Co (JPM.N), Citigroup (C.N), and Capital One Financial Corp (COF.N) are all expected to release results.

Investors also will get a reading on September inflation with the U.S. Producer Price Index on Wednesday and the Consumer Price Index on Thursday, as well as September housing starts on Friday.

But concerns that credit markets have not limbered up, despite a spate of moves to free up money from the Federal Reserve and other central banks, will remain the chief focus for market watchers.

"Normally, I would say we are entering earnings season. But this is purely an emotion-driven market," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank Private Wealth Management in New York.

"It's one where people are trying to raise as much liquidity as possible, and I am getting the sense that the severity of the reaction of the past few days tells you that maybe we are getting relatively close to raising enough capital."

WORST WEEK EVER FOR THE S&P 500

This week's coordinated interest-rate cuts from global central banks, including the Fed, failed to put an end to the nosedive in stocks as investor confidence remained severely strained.

It was the worst week on record for the Standard & Poor's 500 Index .SPX, which closed on Friday below the 900 level for the first time in more than five years. At Friday's closing bell, both the Dow Jones industrial average .DJI and the S&P 500 were down 18.2 percent for the week, while the Nasdaq Composite Index .IXIC was down 15.3 percent.

Since the beginning of October alone, all three major indexes have skidded more than 20 percent.

Analysts said they are hoping to see a coordinated move come out of the G7 to ease the cost for banks to borrow overnight dollars from, or among, each other.

"There's some talk that the coordinated central banks of the G7 will look to basically insure interbank deposits," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co, in San Francisco.

"So that would drive Libor down and basically tell the banks, 'Look, do your normal business, if anything goes wrong, we'll pay for it.'"