Retail stores confirmed yesterday (Thursday) what most analysts had already suspected – the Grinch stole Christmas. The huge discount programs big retailers devised to bolster sales failed to attract enough consumers to save the holiday season.

Dragged down by plunging gasoline prices and an auto industry struggling for survival, retail sales fell by 1.8% in November for a record fifth straight month, according to the U.S. Commerce Department.

This week is shaping up to be another active one on the bailout-and-financing front. First and foremost, Congress returns to work this week to consider a once-unthinkable proposal: Put up billions in taxpayer-backed loans so that Detroit’s “Big Three” can be saved. Expect a fight, however, as the bailout debate finally moves past banks to focus on General Motors Corp. (GM), Ford Motor Co. (F), and Chrysler Corp.

Last week, a few economic reports surprised to the positive side. And this week is potentially very important for the market, says Christian Hill in Investor’s Daily Edge. Last week saw Factory Orders more than double expectations, and the ISM Services Index wasn’t nearly as low as was expected. Add this to the Fed standing pat and there could be some momentum heading into this week. This from Christian…

With oil trading near a three-month low (and corn now at a four-month low), U.S. Federal Reserve policymakers may have just the ammunition they need to hold the line on interest rates for the foreseeable future – or at least until their Sept. 16 policymaking meeting.

You can bet there will be a lot of discussion about interest rates this week, thanks to the release of the producer price index (PPI) report tomorrow (Tuesday) and the U.S. Federal Reserve meeting minutes on Wednesday.