On Tuesday, U.S. stocks traded lower after a 936-point Dow rally on Monday which was the best stock market day in 75 years as cheer over the government’s plan to invest billions in banks. International effort to thaw the credit freeze may have given the markets a temporary jolt of confidence but worries over the strength of economy have deter the bulls from going further.

The Dow Jones Industrial Average surged as much as 400 points early on but then losses steam and started falling off, from positive to negative territory at its session low, down nearly 300 points. A 700-point swing to finish at 9,310.99 down 76.62 points, or 0.8%, with 21 of its 30 components ending in the red. The S&P 500 Index fell 5.35 points, or 0.5%, to 998.01 and the Nasdaq Composite Index was down 65.24 points, or 3.5% to close at 1,779.01.

While the market is still wildly volatile, traders may be ready to start paying more attention to the third quarter earnings as the season has just started shifting their attention slightly from a deep obsession with the credit crises.

Traders will be watching closely to J.P. Morgan, Wells Fargo and Coca-Cola, reporting their earnings before the market open today. Attentions will be on Coke as rival Pepsico disappointed with an earnings miss and and lowered forecast on Tuesday.

Important economic data to focus on ahead of the bell are retail sales for September, a read on the consumer’s willingness to spend, is reporting at 8:30 a.m. The producer price index (PPI) is also reporting at 8:30 as is the Empire State survey. Business inventories are scheduled to be release at 10 a.m. While the Fed will be releasing its beige book on the economy at 2 p.m.

While the U.S. government is offering to take $250 billion worth of stakes in nine top banks to prevent a banking meltdown, it can’t prevent the economy going into a recession. The fact is that the markets quickly turned their focus to the economy as shares turned lower in Wall Street trade yesterday.

European leaders will meet today for an overhaul of the world’s financial structures after Asia joined western bastions of capitalism in bailing out banks to avert a financial meltdown.

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs” - Thomas Jefferson, Letter to the Secretary of the Treasury Albert Gallatin (1802) 3rd president of US (1743 - 1826)

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