Coming Week: Concerns for Credit

Concerns over the credit crunch look set to remain at the forefront of investors' minds in the shortened post-Labor Day holiday week.

One thing remains clear: We are not out of the woods yet. That's despite a triple dose of at least somewhat reassuring news Friday -- fair economic data in the form of lower-than-expected inflation, a soothing speech from Federal Reserve Chairman Ben Bernanke and a proposed White House plan to help cash-strapped homeowners.

No sooner will traders return from the Monday holiday than they will be greeted by a key piece of data. On Tuesday, the Institute for Supply Management's August manufacturing index will be released. That will be followed two days later by the ISM services index, which gives a similar snapshot of the nonfactory sector.

"These are both important and timely indicators and are some of the earliest readings on economic activity for August and do include the period of market turmoil," says Julia Coronado, a senior U.S. economist at Barclays Capital in New York. "In particular, they will give an indication of whether the fallout from financial turmoil has spilled into the real economy."

The consensus is for the ISM index for last month to fall to 53 from 53.8 in July. A reading of above 50 indicates that the sector is expanding, whereas one under 50 portends a shrinking segment. The services index is projected to fall to 54.5 from its previous reading of 55.8.

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