Investors are hoping for a 'cliff-mas' miracle as they head into a holiday-shortened trading week.
Lawmakers in Washington have only one week left to strike a fiscal cliff deal that will avert automatic tax increases and spending cuts due January 1. Many fear that the fiscal cliff could tip the U.S. into another recession.
Investors are on heightened alert over the gridlock in Washington, since politicians struck down their "Plan B" late last week, and debate is halted until after the Christmas holiday.
Anxious investors are also bracing for a low volume trading week. U.S. stock markets will close at 1 p.m. Eastern Time on Monday and be closed entirely on Tuesday, Christmas day.
Foreclosures have also fallen to a five-year low, which has cut down the supply of distressed homes available in the market and helped lift home prices.
Aside from housing, investors will get a glimpse into consumer sentiment as holiday shopping wraps up. Last month, optimism about the job market had consumers feeling more upbeat about the U.S. economy than they had been in four and a half years. It's a closely watched gauge, because consumer spending accounts for more than two thirds of U.S. economic activity.