RPT-Wall St Week Ahead: Election, jobs to set tone for stocks
(Repeating column initially transmitted late on Friday)
NEW YORK, Nov 2 (Reuters) - Wall Street hopes to turn a new page as it heads into November, but this week is littered with hurdles ranging from the U.S. presidential election to a likely gloomy jobs report.
Traders were more than happy to see the back of October, one of the worst months in history for the broader market, and took heart from the fact that it ended with one of the best weeks on record.
Last week's strength came as the host of efforts by central banks and governments to ease credit strains began to bear fruit, and volatility abated slightly. Bargain hunting and funds buying stocks to rebalance their portfolios also helped boost stocks.
For the first part of this week, Wall Street -- like the rest of America -- will turn its attention to Tuesday's presidential election.
Democrat Barack Obama's lead over Republican rival John McCain held steady at seven points as the race for the White House entered its final four days, according to a Reuters/C-Span/Zogby tracking poll released on Friday.
Investors will likely assess the possibility of quick fiscal stimulus after the election and the risk of protectionist measures or more regulation.
Paul Nolte, director of investments at Hinsdale Associates in Hinsdale, Illinois, said as long as the election was decisive, stock markets will likely react positively, regardless who wins.
Thomson Reuters data shows that on average the 60 days preceding a new presidential term yield positive returns, suggesting that the lack of uncertainty after elections usually gives the market a boost.
"Once we know what the balance of power will look like, investors can factor that into the equation. The market may not like who wins, but it will like knowing," said Christopher Zook, chairman and chief investment officer of CAZ Investments in Houston.
But a raft of economic data will be vying for investors' attention, as will earnings reports in the last heavy week of the autumn results season.
Fred Dickson, chief market strategist at Davidson Companies in Lake Oswego, Oregon, said he expects the economic data "won't make very good reading as the news coming from companies who have already reported third-quarter earnings continues to point to an economy that has come to an abrupt stop, primarily as a result of the credit crisis."
HUGE JOB LOSSES FORESEEN
The main event on this week's economic calendar is the October U.S. employment report. That data, due on Friday, is expected to show that U.S. nonfarm payrolls shed 200,000 jobs in October, according to a Reuters poll, while the unemployment rate is forecast to rise 6.3 percent.
Other key economic reports include the Institute for Supply Management (ISM) reports on manufacturing on Monday and non-manufacturing, or service-sector, activity on Wednesday. Both are expected to produce readings showing that the economy contracted in October. Continued...
