By Alexandra Twin, senior writer

NEW YORK ( -- Investors returning from a long holiday weekend better come back well rested, as the weeks ahead bring something of a battle.

"The market is near a critical point where if it loses just a few more percentage points, it's really going to collapse," said Stephen Carl, head equity trader at Williams Capital Group.

The S&P 500 and Nasdaq composite are within shouting distance of a bear market - a drop of 20% off the highs. The Dow is slightly less bruised and battered - it's down just 13.5% from the April highs versus a drop of 16% for the S&P 500 and 17% for the Nasdaq.

Should any one of those major averages surpass that 20% level, it could easily trigger the others, sending the broad markets into an even bigger retreat. Standard & Poor's research shows that a drop of more than 15% results in a "correction" becoming a bear market the majority of the time.

7.9 million jobs lost - many forever

Stocks have slumped for two months straight, with investors starting to bail out in early May after a rally that pushed the S&P 500 up 80% off the bottom hit in March 2009.

Worries about the European debt crisis and the sluggish U.S. housing and labor market got the ball rolling, and the trend has been downward ever since. On Friday, a weak June jobs report left the Dow and Nasdaq at 8-month lows and the S&P 500 at a nine-month low.

There's little on the calendar in the first part of the week that could push the market sharply one way or another. But Thursday and Friday bring readings on housing and retail sales that will speak to the health of the consumer.

"We could see consumers pull back more, but they have already cut so much that unless we are moving into another period of massive layoffs, you're not going to see consumption slow," said Jane Caron, chief economic strategist at Dwight Asset Management.

She said she doesn't think the economy is heading for a so-called double dip recession, but rather an extended period of very slow growth.


<Comment by KiwiDebt Managing director Matthew Nutter>

Although economic recovery has been effectively ‘talked up’ for the past 12 months, the market has spoken. Investor confidence is Internationally at a low, with many taking money out of shares and putting it into ‘under the mattress investments’ Gold has risen to over USD1200 per ounce, which reflects the lack of investor confidence.


This loss in market confidence in US markets may for NZ see a decrease in the NZ share market to levels equaling or exceeding the 87 crash levels.


KiwiDebt see economic recovery hampered by the NZ Government who seem intent on placing a stranglehold on average New Zealanders, pushing them closer to bankruptcy, with, which will see a growth in the rate of voluntary bankruptcy in the next 2 years to historic levels.


So if you are an average New Zealander on Average wages, what will this mean for you.


In addition to the rise in prices due to gst and other tax rises such as Fuel, Power, Alcohol, and Tobacco, you will be hit with rises to petrol, due to the ‘gamblers’ shifting their investments to resources.


Fuel levies will return to couriers, airlines, commuter transport.

This will have a compound effect to the price of everything that you buy, from fuel, food, power, stationery and everything else sold that has to be transported.