U.S. stocks are setting up for another turbulent week, and while Hurricane Irene passed with less damage than had been feared in many areas, the storm's impact on public transit near Wall Street could depress trading volumes.

Traders juggling European debt worries and soft economic data are assessing the impact of the storm, which knocked out subway and train services across the New York City metropolitan area, issues that may not be resolved by the start of work on Monday.

Though the storm itself wasn't expected to be a factor in broader market direction on Monday -- though many analysts forecast pressure on insurance and transportation-related stocks -- there could be some impact as transportation issues leave many offices short-staffed.

If anything, this will just result in lessened volume, said Randy Billhardt, head of institutional sales and trading at MLV & Co in New York.

We don't want to put anyone in danger, so getting in will be based on each person's level of comfort and their ability to get into the city, he said. Since this is usually a quiet week for markets, I won't push anyone to do anything out of their comfort zone.

Lighter volume could leave equities susceptible to heightened volatility, especially given the persisting issues related to Europe and the upcoming U.S. nonfarm payroll report.

The unusually large storm traveled up the U.S. East Coast Friday through Sunday, threatening 55 million people, and was expected to cause billions of dollars in property damage as it continued to barrel north toward eastern Canada as a tropical storm.

The New York Stock Exchange, the Nasdaq Stock Market and the alternative BATS venue said they will start the week as usual.

With the hurricane mostly out of the way, the focus may shift from the Federal Reserve's economic outlook to the August U.S. payrolls report Friday.

Fed Chairman Ben Bernanke, in a much anticipated speech to central bankers in Jackson Hole, Wyoming, on Friday 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.

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.

THE WHITE KNIGHT: TRICHET?

In a move opposite to Bernanke's baton-handing to Washington, some say stocks may find a white knight in the European Central Bank's head Jean-Claude Trichet.

Some hoped that his comments during a panel at Jackson Hole Saturday would open the door for the ECB to buy more bonds from countries struggling with rising borrowing costs.

News this month that the ECB was actively buying government bonds in the secondary market boosted equities by giving some relief to investors worried about the credit and fiscal health of the euro zone.

I'm going to see if (Trichet) is standing by that policy or shying away from it, said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

If he stands by it, that could be a positive for the equities markets because it's going to suggest that if anything, the ECB will try to step in to handle liquidity problems in the European banking system and they don't have to just rely on the European Union leaders.

Recent concern over the exposure of some European banks to the declining prices of euro-zone bonds pushed lenders' shares sharply lower, with an index of European bank stocks <.SX7P> closing lower Friday for a fifth straight week. The long slide has resulted in European bank shares losing more than one-fourth of their market value.

AN UGLY AUGUST

August is shaping up as the worst month for stocks since February 2009, partly on the belief that the U.S. economy was headed for a double-dip recession.

For the month so far, the Dow Jones industrial average <.DJI> is down 7.1 percent, while the Standard & Poor's 500 Index <.SPX> is down 8.9 percent. The Nasdaq Composite Index <.IXIC> is down 10 percent, still in correction mode. Those losses for August so far threaten to overshadow the bright spot at Friday's close, when all three indexes ended the day higher and scored their first weekly gains in more than a month.

The payrolls report Friday is expected to show the U.S. economy created 80,000 jobs this month, according to economists polled by Reuters. In contrast, 117,000 jobs were added to U.S. nonfarm payrolls in July.

The U.S. unemployment rate is seen steady at 9.1 percent.

Wall Street will have to deal with a torrent of data throughout the week, including personal income and consumption Monday, S&P/Case-Shiller home prices Tuesday, factory orders Wednesday and the Institute for Supply Management's factory activity index Thursday, before Friday's payrolls report.

A Reuters poll forecasts that ISM's August survey is expected to show factory activity shrank for the first time since the recession.

(Additional reporting by Jonathan Spicer, Edward Krudy and Ryan Vlastelica; Editing by Jan Paschal and James Dalgleish)