Wall St Week Ahead: Weak stocks face earnings and CPI

By Deepa Seetharaman

NEW YORK (Reuters) - Wall Street will struggle to avoid a third straight week of losses next week as investors face another flood of earnings and data, including PPI and CPI, that are likely to signal a prolonged economic slowdown.

Encouraging news will probably be in short supply.

Hopes for a bailout of General Motors GM.N are fading as lawmakers hint that the legislation is unlikely to pass. Expectations are low that world leaders meeting in Washington over the weekend will deliver a concrete set of plans to combat the worst financial crisis in 80 years.

The Group of 20 meeting, which kicked off Friday night, comes on the heels of another grueling week.

For the week, the Dow Jones industrial average .DJI fell 5 percent, the Standard & Poor's 500 Index .SPX dropped 6.2 percent and the Nasdaq Composite Index .IXIC lost 7.9 percent.

With November almost half over, the Dow has lost nearly 828 points, or 8.9 percent so far, while the S&P 500 has dropped almost 96 points, or 9.9 percent, and the Nasdaq has fallen about 204 points, or 11.9 percent. For the year to date,

For the year to date, the Dow is down 35.9 percent, while the S&P 500 is down 40.5 percent and the Nasdaq is down 42.8 percent.

"We're on a recession watch," said John Praveen, chief investment strategist at Prudential International Investments in Newark, New Jersey. "The question is: 'How deep is the recession going to be?' The economic data will give a sense of that."

Next week, the U.S. Producer Price Index and the Consumer Price Index will give Wall Street a reading on to what extent the weaker economy is keeping inflation at bay. October PPI is due on Tuesday, with October CPI on Wednesday. One factor to keep in mind with both reports: The price of NYMEX front-month crude oil dropped a record 32.62 percent in October to settle at $67.81 a barrel.

Economists polled by Reuters expect overall PPI to drop 1.7 percent in October, compared with a 0.4 percent decline in September. Core PPI, excluding volatile food and energy costs, is pegged to inch up 0.1 percent versus September's 0.4 percent rise.

Overall CPI is forecast to decline 0.7 percent in October, compared with September's flat reading, while core CPI probably rose 0.1 percent, matching September's slight gain, the Reuters poll showed.

Other major economic indicators next week will include the Fed's data on October industrial production, October housing starts and weekly jobless claims. Investors will pore over the data for clues on the slowdown's depth and duration.

TARGET, DELL AND HOME DEPOT

Next week will mark the winding down of earnings season, but a few heavyweights remain, including discount retailer Target Corp (TGT.N) on Monday and tech bellwether Dell Inc (DELL.O) on Thursday. Video game retailer Gamestop Corp (GME.N), whose retail segment is among the few with expectations of brisk holiday sales, also will release earnings on Thursday.

Home improvement retailers Home Depot Inc (HD.N) and Lowe's Companies Inc (LOW.N) could also give more insight into the consumer's mood and the housing market. Lowe's is set to report quarterly results on Monday, with Home Depot's earnings due on Tuesday.