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Is the 6,000 mark the next stop for the Dow?

We came precariously close this past week of edging down below the 7,000 mark in the Dow. In fact, a mere 64 points separated us from 6,999 in the Dow at the market close Friday.

The government’s announcement that it was taking an even bigger stake in Citigroup (C), General Motors’ (GM) $30.9 billion loss for the year and continued bad news about manufacturing and consumer spending have all served to keep any attempts at gains in full check.

Data on deck for this week may make that plunge into 6,000 territory a certainty.

Economists surveyed by MarketWatch believe that Labor Department data to be reported this Friday is going to show more than 30,000 jobs lost in February than January.

Those economists expect payrolls have fallen by 630,000 in February and the national unemployment rate will increase from 7.6 to 7.9 percent, according to MarketWatch.

“With total revenue declining at its worst pace since the late 1950s, many businesses and governments are in survival mode and have no choice but to cut jobs,” Wachovia economists said in the article.

Meanwhile, the market will be watching the outcome of the government’s “stress test” being conducted on the nation’s banks.

Basically, the test involves seeing how the nation’s biggest banks would hold up under the theoretical scenarios of unemployment climbing to 10percent and home values falling another 25 percent (that may not be so far-fetched).

The government sees this as a way to accurately gauge whether or not nationalizing of certain banks is needed.

Banks that failed the test would have up to six months to address any capitalization or other problems.

But critics are already knocking the test, questioning its ability to actually predict how certain banks will fare if conditions continue to deteriorate.

And investors don’t want to see nationalization, for fear that the government’s ownership of a certain institution will turn into a protracted affair that would dilute shareholder equity.

It should be interesting to watch all of this unfold, but you may want to turn off the financial news on TV this week. It’s probably going to be a bumpy ride.

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