One dealer said: 'The markets are all over the place. We are not sure if this week will be the same.'

After the wild swings of last Monday and Tuesday, the Dow Jones Industrial Average closed 1.38 per cent down last Friday, ending at 12,207.17 points. However, for the week as a whole, it ended higher.

The weakness of the Dow may impart some early-week jitters to the Straits Times Index, which rose just 55.23 points last week to close at 3,159.48.

Giving a boost to the markets before the Chinese New Year, however, could be the two-day Federal Open Markets Committee meeting over tomorrow and Wednesday, at which a cut of a half percentage point is expected.

This will come on top of a 75 basis point cut in the federal funds rate to 3.5 per cent last week, the first time in more than 20 years that such a big cut has been made.

With a rate cut on the cards, analysts will focus on what the committee says about the global and United States economic outlook, given the housing crisis in the US, losses by banks and the troubles of bond insurers.

'The longer the volatility continues, the more likely it is that there will be real effects on the economy,' an analyst in the US was quoted as saying by Agence France-Presse.

On Friday in the US, there will also be the release of the non-farm payrolls data for this month, which is seen as an important indicator of whether jobs - and hence the economy - are growing.

Other than the US factors having an impact on the Singapore stock market, there could also be concerns about the Republic's economy slowing down.

Prime Minister Lee Hsien Loong had said last Friday that Singapore's economic growth was forecast at between 4.5 per cent and 6.5 per cent this year as there is uncertainty over the US economy, compared with 7.5 per cent last year.

One dealer said: 'We will have to see how the market reacts to the growth rates.'

Meanwhile, the reporting season for the year ended Dec 31 is gathering pace, and to date, the prognosis is good.

So far, only 13 companies have reported their full-year results. Not one has recorded losses. This handful of companies, including real estate investment trusts, managed a total of $842.8 million in group profits, up 38 per cent from what they made previously.

Among the firms reporting their results this week is the Keppel group of companies, which includes Keppel Land as well as parent Keppel Corp.

Keppel Corp is expected to put in a strong performance on the back of continuing revenue from its various contract wins in the oil rig industry.

sushyan@sph.com.sg