SINGAPORE shares next week will take their cue from US economic data after the expected passage of a bill to bail out the American financial sector, dealers said.

The House of Representatives was expected to vote Friday on an amended bill to buy up to US$700 billion (S$1 trillion) of tainted mortgage-related assets at the root of a global financial crisis.

The Senate passed the bill earlier.

'It's not a magic pill,' Mr Song said, likening the bailout to a blood transfusion.

'But the patient is still very sick.'

Investors will be watching US labour market data due out later on Friday, along with the Institute of Supply Management's report on the key services sector.

Mr Song said investors will be hoping the data provide a 'positive surprise' to kick-start the local bourse next week, but a poor showing could send the market lower.

Investors will be 'sitting on the edge of their seats again,' he said.

In Singapore, the government on next Friday is to issue its advance gross domestic product estimates for the third quarter.

Economists have said Singapore could be entering a technical recession, which is defined as two consecutive quarters of quarter-on-quarter contractions in the GDP, the total value of goods and services produced in a country.

On an annualised, quarter-on-quarter basis, Singapore's economy contracted 6.0 per cent in the second quarter, official data showed.

Mr Song said he expects another six per cent annualised, quarter-on-quarter shrinkage, as well as a year-on-year contraction of a half to one per cent for the third quarter.

The Monetary Authority of Singapore on Friday is also due to release its twice-yearly policy statement.

In the week ended Oct 3, the blue chip Straits Times Index closed at 2,297.12, down 114.34 points or 4.74 per cent for the week.

Average daily volume traded for the week was 1.12 billion shares valued at $1.41 billion, compared with 1.06 billion shares worth $1.15 billion the previous week.