Asian shares mostly decline

The wealthy self-destruct

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(CNN) -- Asian and Pacific markets started the week mostly lower on Monday, reflecting the unsettled nature of the world economy.

Seoul's KOSPI index slumped 2%, while the All Ordinaries average in Australia closed down 1.5%. In Hong Kong, the Hang Seng shed 2.8% and the Shanghai composite was up 0.4%. Markets in Tokyo are closed.

Wall Street finished last week on a down note after a jobs report that saw the economy sloughing off hundreds of thousands of workers.

The Dow Industrials lost 1.6%. The Standard and Poor's 500 slipped 2.1% and the tech-heavy Nasdaq gave up 2.98%.

As Friday's abysmal jobs report made all too clear, Wall Street's whirlwind holiday romance has ended. Investors are back to reality.

Stocks, as demonstrated by the S&P 500, rallied 8% in the last week of December and start of January. But in the first full week of 2009 trading on Wall Street, stocks erased half of those gains.

A brutal jobs report, a rash of miserable retail-sales numbers, and profit warnings or job cut announcements from venerable firms such as Alcoa (AA, Fortune 500), Intel (INTC, Fortune 500) and Wal-Mart Stores (WMT, Fortune 500) were to blame.

The week ahead is likely to bring further testaments to the ongoing recession, specifically the weak consumer spending environment. Retail sales are expected to have dwindled in December, and reports on pricing pressures at both the consumer and wholesale levels are expected to show declines. With so many people out of work and cash-strapped, there's little room for prices to move up.

The quarterly reporting period also begins with results from Dow component Alcoa due after the U.S. market close Monday. Intel and Merrill Lynch are the only other marquee names also due to report this week. The bulk of earnings releases due closer to the end of January.

"The worst damage to the economy has probably already happened, but we're going to keep seeing the messy aftermath in the months ahead," said Larry Glazer, managing director at Mayflower Advisors.

Wall Street has almost gone through its own version of the stages of grief in regards to the recession, he said: "Earlier in 2008 there was a denial of what was happening, then panic set in during the fall, and now we are in a period of acceptance."

Glazer believes that 2009 will be a year of investors trying to rebuild confidence in the market.