Retail sales and data may trip up stocks

NEW YORK (Reuters) - Any new signs that the economy continues to decelerate could make it hard for stocks to regain their footing in the coming days after last week's bruising sell-off and a drop in consumer sentiment to a two-year low.
Monthly data from the Commerce Department, due on Wednesday, is expected to show retail sales rose 0.2 percent in October, according to the consensus forecast of economists polled by Reuters.
That would represent a slower pace from the 0.6 percent increase in September, which was bolstered by gasoline sales.
"We've had a series of weak numbers, so the retail sales could impact the markets quite a bit," said Brian Stine, senior portfolio manager with Allegiant Asset Management in Cleveland.
Wednesday also brings the U.S. Producer Price Index for October from the Labor Department. The consensus forecast is for an increase of 0.3 percent in overall PPI and a 0.2 percent gain in core PPI, which factors out volatile food and energy prices.

The week starts off with the bond market closed on Monday for the Veterans Day observance, but stocks will trade as usual. There is no government data scheduled for Monday.
Tuesday's data includes pending sales of previously owned homes for September. The consensus forecast is for a decline of 2.8 percent, after a big drop of 6.5 percent in August.
On Friday, the Federal Reserve reports on industrial production for October. An increase of 0.1 percent is forecast, identical to the rise in September. Capacity utilization is expected to dip to 82.0 percent from 82.1 percent.

FASTEN YOUR SEAT BELTS
Stine of Allegiant Asset Management expects increased stock market volatility in the remaining weeks of 2007, as some players wind up their activity for the year and liquidity is reduced.
Heilweil of Spectrum Advisory Services believes that Wall Street hasn't seen the last of bad news.
"I doubt the market has quite hit its bottom," Heilweil said.
But he also says there is cash on the sidelines and values are starting to appear in certain sectors.