NEW YORK (Reuters) - Whichever way this week plays out on Wall Street, the market is likely to close out an October that stock investors would rather forget.

So far this month, the Dow is off 22.8 percent, the S&P 500 is off 24.7 percent and the Nasdaq is down 25.8 percent — putting them on track for their worst month since the October 1987 crash. In the S&P's case, this October could wind up being its worst month ever in the post-World War Two era.

Bears are expected to tighten their grip on Wall Street this week unless there are reassurances by the US Federal Reserve and other central banks that authorities have what it takes to reduce the blows from the menacing economic downturn.

But there's likely to be little comfort until the Fed gives its verdict on the economic outlook and the government releases its advance report on third-quarter real gross domestic product (GDP), due on Thursday. The GDP data could be the first negative print since the revised reading for the fourth quarter of 2007. GDP measures the output of all goods and services within US borders.

"The outlook for the market really depends upon what type of action the Fed may take," said Doug Roberts, chief investment strategist for Channel Capital Research in Shrewsbury, New Jersey. "I wouldn't rule out the possibility of something on a coordinated basis globally as well."

In addition to the Fed, the coming week will be packed with numbers — new home sales, consumer sentiment, a survey on home prices, plus durable goods orders and data on personal income and spending. There also will be a deluge of earnings that could confirm investors' fears that the outlook for profits and economic growth is getting even grimmer.

Investors will comb through the economic data and earnings to assess how deep a recession the United States may face.

The Federal Open Market Committee is set to begin a two-day meeting tomorrow to decide on interest rates. The policy-makers' decision is expected on Wednesday at about 3.15 p.m. (Bermuda time).

Futures fully price in a rate cut of one-half percentage point, or 50 basis points, in the fed funds rate, to one percent from 1.5 percent.

The interest-rate futures market also sees a "more than 20 percent" chance that the Fed could cut the fed funds rate more aggressively, to 0.75 percent.

"The anticipation is that the Fed will cut rates. The question is: How much?" said Bucky Hellwig, senior vice president at Morgan Asset Management in Birmingham, Alabama.

"A cosmetic rate cut probably won't have much benefit to the market. Psychologically, a bigger-than-expected cut would confirm that the Fed is actually using every weapon at their disposal to try and make the downturn less painful."

But while the Fed's rate pronouncement will get attention, it is the central bank's assessment of the economic conditions and outlook that investors will zero in on to decide whether they should buy, keep or sell stocks. The benchmark indices are at their lowest levels since the spring of 2003.

Fed chairman Ben Bernanke warned during a congressional hearing last week that the US economy could be dogged by an extended period of sub-par growth and, as a result, a second economic stimulus plan might be needed.

It may not be coincidental that the last trading day of October 2008 happens to be Halloween.

The month is notoriously troublesome for stocks since the market crashes of 1929 and 1987. So any whiff of encouraging news this week could be fodder for the bulls.

The Stock Trader's Almanac calls October the jinx month because of the crashes in 1929 and 1987, as well as the slide on October 27, 1997, the back-to-back massacres in 1978 and 1979 and Friday the 13th in October 1989.

Yet October sometimes turns out to be a turning point when bears, after biting huge chunks out of the stock market, go into hibernation.

For weeks now, the threat of economic upheaval has rattled markets around the globe as panicked investors and institutions, including hedge funds, rush to liquidate risky positions to raise cash.

In a dramatic move before Friday's opening bell, US stock futures trading was frozen several times as benchmark gauges hit levels that spur authorities to institute measures to prevent disorderly downdrafts amid a global slide.

Concern that the global economic downturn, sparked by the US housing slump, might be deeper than expected drove US stocks to close sharply lower on Friday. For the week, the Dow Jones industrial average was down 5.35 percent, while the S&P 500 was off 6.78 percent and the Nasdaq was down 9.31 percent.