NEW YORK (Reuters) - The rocky ride for the US stock market is likely to intensify this week with the survival of one of the biggest investment banks in doubt and regulators rapidly burning through options to limit more damage to the financial system.

All eyes will again be on Bear Stearns come today for any further word about the condition of the fifth-largest US investment bank, which on Friday had to get emergency funding as fallout from the global credit crisis took its toll.

Bear Stearns is among four major Wall Street firms reporting earnings this week.

But the Federal Reserve's policy-setting meeting tomorrow will be the highlight of the holiday-shortened week. The US stock market will be closed for Good Friday.

US interest-rate futures showed more than a 50 percent chance on Friday that the central bank will cut its benchmark fed funds rate target by 100 basis points this week to revive an economy that many say is already in recession.

"Most of the focus will be on the Federal Reserve. Will the Fed cut rates? And if so, how much? And most importantly, what will the statement that accompanies the decision say?" asked Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York. "Frankly, the Fed said it all in their bailout of Bear Stearns."

Market participants have questioned the effectiveness of the US central bank's efforts. On Tuesday, March 11, the Fed teamed up with other central banks to get up to $200 billion in fresh funds to cash-starved markets. The market rallied sharply for its best day in five years, but most of the gains were gone by the end of the week.

Then on Friday, Bear Stearns said a cash crunch forced it to turn to the Federal Reserve and JPMorgan Chase for emergency funds.

That revived investors' fears about the depth and breadth of the credit crunch. Bear's stock tumbled as much as 50 percent on Friday to a session low at $28.42, its lowest since October 1998.

The 28-day emergency line of funding for Bear Stearns came just days after Bear, which has been hard hit by its heavy exposure to the faltering US mortgage market, had dismissed market rumours of a cash crunch and said it was still a healthy player in the global web of trading and finance.

That heightened concerns that there may be other banks facing liquidity issues.

More clarity about the extent of the write-downs may come when four big US investment banks report results this week.

Bear Stearns is first out of the block today, which happens to be St. Patrick's Day. Bear moved up its earnings release, which was initially scheduled for Thursday.

The change in schedule may indicate that Bear plans to make a significant disclosure, said Rebecca Engmann Darst, an equity options analyst at Interactive Brokers Group.

"Speculation is rising that Bear Stearns could be the subject of a takeover or 'takeunder' over the weekend - possibly with JPMorgan Chase," she added.

Lehman Brothers and Goldman Sachs will report earnings tomorrow, followed by Morgan Stanley on Wednesday.

On Friday, Lehman's stock was the second-biggest decliner among investment banks, falling 14.6 percent, or $6.73, to close at $39.26 on the New York Stock Exchange.

Forecasts and stock prices have come down sharply for all the big banks, as the credit crunch spreads across almost every market - the contagion effect that Wall Street executives last year assured analysts was not happening.

With Friday's slide, the S&P 500 was close to falling into a bear market.

If it drops further this week, it could cross a threshold that normally indicates a bear market, which would be a drop of 20 percent from its October closing high. The Nasdaq turned bearish last month.

The Dow Jones industrial average plunged 194.65 points, or 1.6 percent, to end on Friday at 11,951.09, with only one of the 30 Dow components - Boeing Co. - finishing higher.

The Standard & Poor's 500 index fell 27.34 points, or 2.08 percent, to 1,288.14, and the Nasdaq Composite Index lost 51.12 points, or 2.26 percent, to close at 2,212.49.

For the week, the Dow industrials gained 0.48 percent, thanks to Tuesday's huge rally. But the Standard & Poor's 500 index slipped 0.4 percent and the Nasdaq was unchanged - right to the penny.

For the year, the Dow is down 9.9 percent, the S&P 500 is off 12.27 percent and the Nasdaq has lost 16.58 percent.

It was a wild week, starting with Monday's story in The New York Times that New York Governor Eliot Spitzer had patronised a $1,000-an-hour prostitute. The reaction to his downfall was gleeful on Wall Street, where Mr. Spitzer had zealously prosecuted wrongdoing during his years as New York state's attorney general. On Wednesday, most traders had their TVs tuned in to watch the live broadcasts of Mr. Spitzer's resignation.

On Thursday, US crude oil futures hit a record high of $111 a barrel and gold jumped to a record $1,000 an ounce while the dollar sank to record lows against the euro.

By Friday morning, the governor's scandal seemed like a distant memory when news broke about Bear Stearns' liquidity crisis. The dollar fell below 99 yen to 98.91, its lowest in 12-and-a-half years; the euro hit $1.5688, a record high after Bear Stearns was forced to get emergency funding.

Wall Street's fear barometer, the Chicago Board Options Exchange Volatility Index, or VIX, jumped 14.2 percent on Friday to end at 31.16, its best close since March 2003.

Investors piled into bonds, driving the price of the 10-year US Treasury note up 2?2 and pushing its yield down to 3.44 percent from 3.53 percent on Thursday.

Among the coming week's key economic data will be the US Producer Price Index on Tuesday, which will get plenty of attention due to concerns about rising inflation even as the economy slows. Economists polled by Reuters expect February core PPI, excluding volatile food and energy prices, to rise 0.2 percent. In January, core PPI gained 0.4 percent.

On Friday, a government report unexpectedly showed February's Consumer Price Index, another top inflation gauge, was unchanged. While that leaves more room for the Federal Reserve to cut interest rates, analysts were skeptical about the tame inflation picture painted by the data because prices of oil, gold and other commodities recently hit record highs.

Wall Street will get some other economic data this week that could give more clues about the US economy's health, with industrial production and capacity utilisation due today and February housing starts set for tomorrow.

Weekly jobless claims and a March index of regional business activity from the Federal Reserve Bank of Philadelphia will round out the economic week on Thursday.

Wall Street will have one thing in mind as it watches the week's stream of numbers, Mr. Johnson said.

"The question is: Did the economy enter a recession in February? We will get an answer to that question when we see the industrial production and housing numbers," he said.