Stocks slide ahead of Fed rate decision and jobless data

       The US economy has been kick-started into growth but stock investors still face an uncertain outlook as Wall Street gears up for comments from the Federal Reserve and a key report on employment this week.
       The Fed's monthly policy statement could signal fewer liquidity measures for markets, while nonfarm payroll data and the Institute for Supply Management surveys on the manufacturing and services sectors will give early indications of how the economy is faring in the fourth quarter.
       Investors are nervous that monetary and fiscal stimulus measures may be ended too soon.
       "If the government pulls out too early and they are not spending,[and] the consumer is not spending, you've got a big issue," said Anthony Conroy, head trader for BNY ConvergEx, an affiliate of the Bank of New York.
       US stocks slumped on Friday in a stark reminder that investors remain highly sensitive to signs of economic weakness. The Dow slid 2.6% on the week to close on Friday at 9,712.73. The Nasdaq lost 5.1% to 2,045.11 and the broad-market Standard & Poor's index shed 4% at 1,036.19.
       "You got a spurt that was stimulusdriven," said Fred Dickson, a market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon."The common belief right now is that the economy will move forward in the fourth quarter, but probably at a little slower pace than in the third quarter."
       Financial markets are bracing for a possible change of wording in the Federal Open Market Committee statement, expected on Wednesday at the end of its two-day meeting, which could hint interest rates are headed higher late next year.
       That, and any hint the Fed may start to pull back some of the liquidity it has been providing to markets through its debt purchases, could hurt stocks.
       "If you got language along those lines that suggested that they could be raising [rates] maybe a little bit earlier than what folks were expecting, then I would expect the market to sell off on that news," said Thomas Wilson, a managing director in the institutional investments and private client group at Brinker Capital in Berwyn, Pennsylvania.
       The number of jobs cut by employers is expected to have fallen in October.But a negative surprise like last month,when the unemployment rate hit a 26-year high, could undermine confidence in the recovery, driving stocks lower.
       The nonfarm payrolls data, due on Friday, are expected to show that employers cut 175,000 jobs in October, according to economists polled by Reuters.In comparison, September's job cuts totalled 263,000, far exceeding the forecast. The unemployment rate is forecast to rise to 9.9% in October from 9.8% in September.
       Third-quarter earnings season is winding down, but a few bellwethers could offer further insight into the economy.
       Earnings and the outlook from Ford Motor Co, the only US car manufacturer to avoid bankruptcy, could be an important indication of how auto sales might fare without government help.
       Ford's report today will be followed by automobile sales data the next day.Analysts and executives expect total US vehicle sales to rise to an annual rate of about 9.8 million units in October, up from 9.2 million the month before.
       US auto sales boomed in August as the government's $3 billion in "Cash for Clunkers" incentives drove sharp gains.
       Pulte Homes, the largest US homebuilder, is set to report earnings on Wednesday. Its comments will be watched closely for signs the housing recovery is finding firmer ground.
       Pending home sales, due today, are expected to be unchanged in September after jumping 6.4% in August.
       Talk of ending an $8,000 tax credit for first-time home buyers, which helped support the housing market, has ruffled investors. The tax credit is set to expire on Nov 30.
       Congress is considering a proposal to extend the tax credit. But before a deal is cut, it remains a wild card for markets.