All three major market indexes suffered losses on Friday in the wake of news that Dubai’s government-held conglomerate, Dubai World, was postponing payment on $60 billion worth of debt. For the week, the Dow fell 0.1 percent, the Nasdaq fell 0.4 percent, and the S&P 500 managed to edge up 0.01 percent.

December is historically the second best month for the stock market. In the coming week, positive figures in the market would be a bullish indicator for the remainder of the month. But the large gains made since the March lows leave the market vulnerable to a correction. And investors may fear that repercussions in the financial sector from the Dubai situation could spread to the broader market.

Unemployment and consumer spending remain as major hurdles to overcome as the economy recovers. In the coming week, retailers’ same-store sales data will provide a preliminary look at holiday season spending.

On Friday, unemployment figures for November are expected to show fewer job losses than in October. Last week, initial unemployment claims fell to their lowest level in more than one year, indicating, perhaps, that job losses have peaked. The unemployment rate, however, will likely remain at 10.2 percent.

Other economic data for the week includes U.S. auto sales, which are expected to show that the industry is heading toward recovery. The Institute for Supply Management will report on both manufacturing and service sectors. Any reading above 50 indicates expansion in the sector, and manufacturing is forecast to come in at 55.0, down from October’s figure of 55.7, while the services reading is expected to rise to 51.5, up from October’s figure of 50.6.

On Thursday, Ben Bernanke will appear before the Senate as hearings begin on his nomination for a second four-year term as chairman of the Federal Reserve. He will face criticism over the bank’s ineffective action preceding the financial crisis, but is expected to be confirmed nonetheless.

9 Stocks to Watch

We're watching nine stocks this week for potential breakouts. Our nine stocks on the watch list are the following:

3M Company (MMM)
American Express Company (AXP)
CenterPoint Energy, Inc. (CNP)
DTE Energy Company (DTE)
Republic Services, Inc. (RSG)
Staples, Inc. (SPLS)
Textron Inc. (TXT)
Windstream Corporation (WIN)
XL Capital Ltd. (XL)

Dave Mecklenburg is the Editor-in-Chief of TigerSharkTrading.com.