Stocks in perfect storm of Irene, jobs

NEW YORK (Reuters) – Stocks are setting up for another turbulent week that will begin with a focus, oddly enough, on the weather

Traders juggling European debt worries and soft economic data are now staring at satellite images, tracking the path of Hurricane Irene, expected to hit New York over the weekend.

The unusually large storm traveled up the U.S. East Coast on Friday, threatening 55 million people, and was expected to cause billions of dollars in property damage.

Major U.S. exchanges are preparing to deal with power outages and flooding, and that could affect trading on Monday.

For now at least, the NYSE and Nasdaq expect to be open for trading as usual on Monday morning. The New York Stock Exchange and Nasdaq repeated on Saturday that, despite the arrival of Hurricane Irene in New York, both expect to conduct a normal trading session on Monday.

The Big Board said a final decision would be made over the weekend, particularly on its trading floor in the low-lying financial district of Manhattan, which could see a storm surge and flooding.

The U.S. Securities and Exchange Commission and exchange officials will discuss the storm’s impact and plans for opening trading at the start of the week in a conference call on Sunday afternoon at 1 p.m., according to a source familiar with the plan.

One senior trader at a proprietary trading firm in New York said Friday that Hurricane Irene had destroyed any chance of a rally that had looked likely, given the extent of short positions that had been building in equity markets.

“If this hurricane is a disaster, my guess is we are going to be down 30-40 handles on Monday,” he said.

Property insurers Allstate <ALL.N> and Travelers <TRV.N> hit two-year intraday lows on Friday, partly on worries over claims due to the hurricane.

“We intend to be open, but Mother Nature may have other plans,” said Lou Pastina, executive vice president of NYSE operations.

After that, the focus may shift from the Federal Reserve’s economic outlook to the August payrolls report on Friday.

Fed Chairman Ben Bernanke, in a much anticipated speech to central bankers in Jackson Hole, Wyoming, said most of the burden for ensuring a solid foundation for long-term growth lay at the feet of the White House and the U.S. Congress.

U.S. President Barack Obama is expected to detail plans to create jobs after he returns from vacation the week after next. Investors will have a few days to position themselves ahead of Obama’s speech, with the key payrolls report for August due Friday.

“This was clearly a punt from Bernanke to Obama, who will announce a jobs initiative soon,” said Lance Roberts, CEO of Streettalk Advisors, an investment management firm in Houston. “The market thinks we may now get stimulus from the government