Today's Market Update with...

Harvey Katz, Value Line's Managing Editor

The stock market, so strong for so long, hit the proverbial brick wall on Friday, as fears engendered by reports of a decline in consumer spending and consumer sentiment, pulled equities broadly and sharply lower. By the close, the Dow Jones Industrial Average was off by 250 points.

Our sense is that the economy, which rose by a surprisingly strong 3.5% in the third quarter, will make no such headway in the current period, with growth likely to be just in the 2% range. In fact, we think growth will then average a modest 2%-3% for much of 2010 before better housing and employment data bring about a more typical business expansion by 2011.

Meanwhile, a new week dawns and we will be getting critical and perhaps market-moving data in the days to come, highlighted by key reports on manufacturing this morning, non-manufacturing activity on Wednesday and employment on Friday. It should be an interesting and pivotal week for the equity markets. We also have the Federal Reserve's FOMC meeting tomorrow and Wednesday.

As for the market, a sell off in Asia overnight did not extend to Europe this morning, and our own futures are now suggesting a somewhat better market opening in less than an hour from now.