That's not to say the stock market will keep plunging the way it has been. To be sure, bargain hunters will likely see Wall Street's recent slides as buying opportunities, particularly if encouraging news comes along like a hefty interest rate cut or better-than-expected profits at the nation's big-name companies.
Upbeat financial results in the coming week from some of the large, multinational companies that make up the Dow Jones industrials - Microsoft Corp., AT&T Inc., Johnson & Johnson, Pfizer, Caterpillar Inc. and Honeywell International Inc. - could lead to some rallies. But no one should be surprised if the gains evaporate as soon as they developed.
Investors simply have too many questions to buy into stocks with confidence - questions that are not going to be answered until all fourth-quarter results are in, and until Wall Street has a better sense of how the still-young first quarter is going.
"We've baked in a lot of bad news. But we don't know the magnitude of the bad news yet. We don't know if we've overdone it," said Arthur Hogan, chief market analyst at Jefferies & Co. "I don't think there's any combination of things next week that will necessarily turn things around."
The Dow sank 4.02 percent last week, the Standard & Poor's 500 index dropped 5.41 percent, and the Nasdaq composite index fell 4.10 percent.
Last week brought exactly what investors feared: a wretched manufacturing reading from the Philadelphia Fed, dismal home construction data from the Commerce Department, a worse-than-expected profit at Intel Corp. and historic losses at Citigroup Inc. and Merrill Lynch & Co.
Even the more profitable banks, such as JPMorgan Chase & Co. and Wells Fargo & Co., said they were bracing for more problems in a wide swath of consumer credit, from home equity loans to auto loans and credit cards.
This week will bring earnings from more banks, notably Bank of America Corp. and Wachovia Corp. Companies outside the financial sector with a strong global presence might ease some of the anxiety about America's corporate muscle, but it is unlikely they will cure it.
"There is an earnings recession," said Hugh Johnson, chief investment officer of Johnson Illington Advisors, noting that S&P 500 operating earnings growth was lower in the third quarter of 2007 than in second quarter, and is sure to be lower in the fourth quarter of 2007 than in the third.
"The real key question is not whether there's going to be an economic recession. It's not when the economic recession is going to end," Johnson said. "It's when is the earnings recession going to end?"
Martin Luther King Day on Monday is a market holiday and, after that, the government will release only a few economic reports ahead of the Fed's Jan. 29-30 meeting on interest rates. Wall Street will probe those that do come out more closely than usual for clues about how deflated the economy is and how that might affect business.
The Labor Department's weekly jobless claims data will also be watched, as will the National Association of Realtors' report on December sales of existing homes. Economists expect existing home sales to slip again after inching up in November.
With market pessimism at heights not seen in years, it is certainly possible the market is near its bottom. But there are few investors eager to bet on when stocks will resume their climb, and how long it will be before new records are reached again.
"Maybe by the end of the first quarter, things will line up for the market to find to some stability," said Steven Goldman, chief market strategist at Weeden & Co.
