Features

NEW YORK — If investors haven’t thrown in the proverbial towel yet, they might be getting close after watching the market this week. 

Leading stock indicators sank to levels not seen in five years on Wednesday, and were down again in early trading Thursday, as investors showed no sign that they were ready to look past the accounting scandals that have plagued corporate America this year. 

“This market has completely broken the spirit of investors,” said Al Mirman, strategist at V Finance in Sarasota, Fla. “It is going to take a good year for investors’ confidence to be reinstated.” 

The latest selloff came amid a bear market that was already one of the worst in U.S. history. Wall Street has seen a widespread dumping of stocks for nearly eight weeks. 

Over the first three sessions this week, the Dow fell 566, including a drop of 282 on Wednesday, the blue chips’ biggest one-day loss since September. The market closed below 9,000 on Wednesday for the first time since October. 

In midafternoon trading Thursday, the Dow was down 22.70, or 0.3 percent, at 8,790.80. But the broader market was higher. The Nasdaq composite index rose 20.47, or 1.5 percent, to 1,366.48, having closed Wednesday at a low not seen since May 1997. 

The Standard & Poor’s 500 index rose 2.86, or 0.3 percent, to 923.33, having dropped Wednesday to a closing low not seen since November 1997. 

The week’s losses are no doubt stunning, especially when considering the market is just two years removed from one of the most remarkable runs of all time. At the height of the dot-com frenzy, the Nasdaq was above 5,000. 

While the latest losses weren’t prompted by a big new accounting fiasco, there was reason to question the strength and pace of a business recovery. 

For example, General Motors in early trading Thursday fell $1.16 to $46.45 after UBS Warburg cut its rating on the stock to “hold” from “buy.” On Wednesday, Banc of America downgraded GM. 

Bristol-Myers sank $2.15 at $21 on news that the Securities and Exchange Commission is investigating whether the drug company inflated revenues last year by $1 billion. 

The move left many investors feeling that few, if any, safe havens exist in the market. 

Pharmaceutical company Merck on Wednesday dropped $2.18 to $43.57 after announcing Tuesday it was postponing for the third time in two weeks the initial public offering of its Medco unit. The price showed little change Thursday afternoon. 

There were some bright spots, Thursday. Kodak climbed $2.16 to $28.80 by midafternoon after raising its second-quarter estimates. Wal-Mart rose 19 cents to $53.95 after raising its second-quarter earnings estimate due to stronger-than-expected sales in June. 

Although improved earnings in the coming months could provide a boost to the market, analysts say corporate trust is the key factor. 

“True, we need better (earnings) numbers, but we need numbers we can trust,” Mirman said. 

Investors might not be happy sitting on Wall Street’s sidelines, but with the problem-ridden market headed for a third straight losing year they see no reason to budge. 

After a string of accounting debacles at such firms as WorldCom, Xerox and Enron Corp. and more than two years of declines on Wall Street, investors can’t be blamed for sitting on Wall Street’s sidelines, analysts say. 

“Confidence is so low that the average investor is saying, ’I am fine keeping (my money) in a money market account at 1.5 percent. And when I see the worst is over, maybe I’ll think about putting more money in the stock market,”’ said Thomas F. Lydon, president of Global Trends Investments in Newport Beach, Calif.