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Stock market strategists warned, in fact, that the coming weeks will likely remain highly volatile and the major US market indexes will again threaten to break into ever lower territory as the extent of the damage to the economy here and abroad unfolds.

October jobs report: Unemployment 6.5% Highest since 1994

The release of the October jobs report last Friday stunned Wall Street by coming in significantly weaker than economists' already glum expectations. They showed a labour market already in trouble, and with job cuts spreading throughout almost all sectors of the economy, they were a sign that the unemployment rate is likely to rise well above the 6.5 per cent rate that it recorded last week, its highest reading since March of 1994.

GM and Chrysler still in danger of going under

Money manager Paul Krieg, who runs a large cap domestic equity fund for Seville Investments said, 'The problem is nobody really knows, and when you've got that kind of uncertainty looking three to six months out, on top of having a credit market that's still unhealthy and a long list of major companies, like GM and Chrysler, that are still in danger of going under, the only people willing to dip their toes in the water right now are short-term trading-oriented investors, who pull their money out as quickly as they put it in. I see nothing on the horizon that would convince me we're going to emerge from a bear market anytime soon.'

Even the solid bounce-back that stocks enjoyed last Friday following two awful days of selling did little to reassure Wall Street traders. 'Today's action was just one in response to an oversold condition after a 10 per cent drop in just two days,' said Mr Krieg, referring to the biggest two-day sell off in the history of the Dow Jones Industrial average that occurred last Wednesday and Thursday. 'It's hardly as though we got any good news.'

In fact, the bluechip index rose 248.10 points, or 2.9 per cent, to close at 8,943.89, even as the jobs report showing 240,000 new layoffs came out and GM announced a US$2.5 billion loss for the third quarter and said that it may have to halt assembly lines to deal with a cash shortfall. The Standard & Poor's 500 index also gained 2.9 per cent, while the Nasdaq added 2.4 per cent.

For the week, all three major market indexes lost just about 4 per cent.

Investors on Lookout for new indications of how president-elect Barack Obama

The coming week is unlikely to be as difficult to bear, with a light schedule of economic data, and the disastrous third-quarter earnings season limping to a close. But investors will be on the lookout for new indications of how president-elect Barack Obama intends to address the severe economic downturn.

Last Friday, following a meeting with economic advisers including former Fed chief Paul Volcker and former Treasury secretary Lawrence Summers, Mr Obama promised that 'immediately after I become president, I will confront this economic crisis head-on by taking all necessary steps to ease the credit crisis, help hardworking families and restore growth and prosperity'.

Mr Summers and Mr Volcker are among the reported favourites for roles high up in Mr Obama's administration, as is Timothy Geithner, current president of the New York Fed. Appointments of any of those three would be welcomed by Wall Street, as would concrete signs of the economic stimulus plan that Mr Obama is reportedly discussing with congressional leaders and President George W Bush.

Although few companies are left to report earnings in a season that has seen a 14 per cent profit contraction thus far, several major retailers - a sector expected to bear a significant brunt of the impact of the recession - will report earnings, including Wal-Mart Stores Inc, Starbucks, Nordstrom and Penney. Beleaguered insurer AIG is also expected to report today, as is Microsoft tomorrow.