(Repeats story that ran on Friday)

NEW YORK, Jan 15 (Reuters) - The dramatic sell-off on Wall Street through most of the past two weeks could signal a capitulation-type blowout, giving fundamentals the upper hand for the next week.

The current slide in stock prices, which on Friday briefly dragged the S&P 500 to levels not seen in more than a year, is reminiscent in breadth and tone of drop-downs seen during the Great Recession.

Some argue the decline is warranted. In addition, the market has not seen the kind of sell-off in high volume that signals a capitulation, and the S&P 500 could enter a bear market, more than 9 percent below current levels.

From most indications the U.S. economy is far from being in a recession, according to many market participants. The repricing in stocks could help the market shift back to fundamentals after years of focusing on the Federal Reserve and its ultra-low interest rate policy.

That is welcome news for some in the market who have seen stocks trade on variables other than economic data and company earnings.

“I actually am encouraged to see the market drop so we can just get to fair value and take it from there, then it is really determined by the path of the economy, and profits and revenues,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

“To me, this is really a result of Fed influence, just a reversing of all this Fed intervention.”

Many point to a slowdown in China’s economy and its expected weight on global growth as a reason for the slide in stocks and the 12-year lows in crude oil futures.

The Shanghai index closed Friday at its lowest level since December 2014, down more than 20 percent from its November high and nearly 44 percent from its 2015 high.

“The spillover from China has been concentrated in crude oil and there are reports that commodity hedge funds have experienced a sharp increase in margin calls as the price of oil falls,” said Gail Dudack, chief investment strategist at Dudack Research Group in New York in a Friday note to clients.

“Typical of most margin unwindings, selling will flow into equity markets since stocks are often the most liquid assets in portfolios. This explains why movements in the (S&P 500) have been closely aligned with crude oil in recent weeks.”

Friday had some of a capitulation type feel, with 944 New York Stock Exchange issues hitting a 52-week low. It is only the fourth day since the end of 2008 that the number is above 900. It also was the seventh day in a row of more than 500 NYSE stocks at their lowest in at least a year, a streak not seen since October 2008 -the month following the bankruptcy of Lehman Brothers.

Major indexes fell Friday for a third consecutive week. The S&P closed at its lowest since late August while the Nasdaq Composite ended at its lowest since October 2014.

FUNDAMENTALS ON TAP

U.S. markets are closed Monday for the Martin Luther King holiday and on Tuesday will reopen to fresh industrial output and retail sales data out of China. Chinese GDP data is also due Tuesday, late Monday on Wall Street.

“Some of the (market) fears may be comforted if we get good numbers out of China Monday evening,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

He said if next week’s U.S. core inflation data does not surprise on the upside and manufacturing returns to expansion investors could feel more comfortable returning to the stock market.

“That in addition to strong earnings, of course.”

Among the largest companies to report results next week are Morgan Stanley, Bank of America and Goldman Sachs in the financial world, while Starbucks and a handful of airlines will speak to the health of the consumer. (Aditional reporting by Dion Rabouin, Chuck Mikolajczak; Editing by Bernard Orr)