There is a full economic calendar this week, but all eyes will be on the two-day FOMC meeting and the rate decision on Wednesday.

It will be interesting to see how the FOMC approaches this meeting. The current Fed Funds target rate is 0-0.25%, which in and of itself is rather strange. It is a moving target, not a fixed rate. Who determines which rate is used? My guess is this meeting will be used to clarify what the rate is. The Fed will either officially reduce it to 0% in a continued effort to resuscitate the economy, or lock it in at 0.25%. This would at least leave the Fed with one perceived bullet in the gun.

The rest of the…

BASF Halts 80 Factories; Oil Prices Slide to $53 a Barrel; Chinese Automakers Ask for Gov’t Aid; October Housing Starts Hit 49-Year Low; Honeywell Lands Engine Deal; Fed Sees Year-long Recession; Holiday Sales and Traffic to Plummet; BJ’s Profit Jumps 24%

There is no way to sugar coat it or paint a rosy picture. This week could be disastrous for the market. Coming off eight straight down trading days, and the largest weekly percentage drop in the history of the Dow, the economic calendar provides no relief.

As the financial sector continues to roil with uncertainty and unease, Kraft Foods Inc. (NYSE:KFT) has been selected to replace American International Group Inc. (AIG) in the Dow Jones Industrial Average, reports Jennifer Yousfi in Money Morning. AIG stock plunged Thursday after the U.S. Federal Reserve’s $85 billion bailout of the flagging insurer, taking the 112-year old blue-chip stock index down with it.

Earnings season will plug along this week as reports from several banks provide the latest insight into how well the beleaguered financial-services sector is weathering the global credit-crisis storm.

Here’s a quick heads up from Christian Hill at Investor’s Daily Edge on economic and earnings data due this week…

Brian Hunt brings you the New Highs and Lows of note last week.

Continental’s Cost Cuts; Possible Eurozone Telecom Merger; Rising Tide of Foreclosures; Jobless Claims Drop; Inflation Controls Threaten China Stocks; Honeywell Shot Full of Holes; Dupont’s Bumper Crop; Novartis on the Guard Against Influenza.