Market’s Loss Heavy Across the Board

Wall Street’s steep slide accelerated on Friday, leaving some major stock market indexes down more than 10% from their recent highs.

The severity of the decline may mean that it is close to running its course, some analysts say -- if it’s a typical 10% to 15% pullback within a continuing bull market.

“I think there was some really indiscriminate selling late Thursday and on Friday,” said Michael Holland, head of money manager Holland & Co. in New York.

The technology-dominated Nasdaq composite index is already down 12.4% from the 3 1/2 -year high it reached Dec. 30. And with Friday’s nearly 200-point dive, the Dow Jones industrial average is now down 7.8% from the four-year high it hit March 4.

Barometers of small-company stocks have also been hammered. The Russell 2,000 index of smaller shares is down 11.3% from its record high reached Dec. 28 after sliding 1.9% on Friday to 580.78.

Investors, spooked by fears that the economy may be slowing, have been bailing out of many of the stock sectors that rewarded them the most over the last two years, including industrial, energy and transportation shares.

Losers swamped winners by more than 3 to 1 on the New York Stock Exchange and on Nasdaq on Friday, in very heavy trading.

Although it may raise the fear level on Wall Street, panic selling can create bargains for investors who can take a longer-term view, Holland said.

He also said an upbeat business outlook from General Electric on Friday gave him more confidence that worries about the economy were overblown.

“I’m going to take that to the bank,” Holland said of GE’s optimism. GE shares rose 25 cents to $35.75.

In the rest of the market, however, Friday’s losses were hefty. The Nasdaq plunged 38.56 points, or 2%, to 1,908.15. The Dow fell 191.24 points, or 1.9%, to 10,087.51. The broader Standard & Poor’s 500 index retreated 19.43 points, or 1.7%, to 1,142.62.

John Buckingham, manager of the Al Frank mutual fund in Laguna Beach, said the sharp losses in many stocks this year were making them much more attractive to funds like his, which he said had a three-to-five-year investment time horizon.

Apple Computer, for example, dropped $1.91 to $35.35 on Friday and has fallen nearly 22% since mid-February. “I like Apple more today than two days ago,” Buckingham said.

Pullbacks within bull markets aren’t unusual, analysts noted. A typical “correction” chops 5% to 15% off major indexes from their recent highs.

Only when such declines exceed 20% does Wall Street begin to fear that a new bear market is underway, meaning a potentially deep and longer-lasting slide.

Investors on Friday failed to take solace in another drop in oil prices. Near-term crude futures in New York fell 64 cents to $50.49 a barrel.

As on Thursday, some investors fleeing stocks moved their money into Treasury bonds, driving down yields on those issues. The 10-year T-note yield ended at an eight-week low of 4.24% on Friday, down from 4.32% the previous day.

The recent rapid decline in Treasury yields -- the 10-year T-note was at 4.65% on March 22 -- is another sign that investors expect the economy to slow, perhaps enough to persuade the Federal Reserve to halt its credit-tightening campaign, analysts say.