NEW YORK >> The end of the second quarter was welcomed this past week by a Wall Street eager to forget the accounting scandals and earnings concerns that have plagued the market. But there is little reason to think the next three months will be much better. Market pessimism holds
By Lisa Singhania
Associated PressAlthough there is some hope that earnings will improve, analysts say many investors have become so disillusioned that it will take a sustained, solid dose of good news to turn the market around.
"There are still so many crosscurrents of political and accounting issues and things like that, as well as management credibility questions. And all of it is still swirling around, and that feeds volatility," said John Forelli, portfolio manager for Independence Investment LLC.
The market managed to end the week mixed, but the Nasdaq composite index finished the second quarter down 20.7 percent and the Standard & Poor 500 index lost 13.7 percent. The Dow Jones industrials fell 11.2 percent.
The selling, which included a five-week slide for the major indexes, got so bad that on Wednesday the Nasdaq and S&P dipped beneath their post-terror attack lows.
The pullback over the quarter wasn't surprising given the onslaught of negative company news. Warnings from bellwethers including Intel and Abbot Laboratories dampened Wall Street's hopes that a solid turnaround was under way. At the same time, a wave of new accounting and ethics scandals involving companies ranging from ImClone and WorldCom gave investors another reason to doubt the validity of any recovery.
The indexes ended the week on a mixed note, but snapped a five-week losing streak that had been in place since May 17.
For the week, the Dow dropped 10.53, or 0.1 percent, after dropping 26.66 to 9,243.26 yesterday.
The Nasdaq had a weekly advance of 22.25, or 1.5 percent. Yesterday, it gained 4.01 to 1,463.21.
For the week, the S&P 500 rose 0.68, or nearly 0.1 percent. Yesterday, the index fell 0.82 to 989.82.
The Russell 2000 index managed a weekly gain of 1.58, or 0.3 percent. Yesterday, the Russell advanced 3.93 to 462.65. The Russell tracks smaller company stocks, which often are first to benefit when business rebounds.
The Wilshire Associates Equity Index, which represents the combined market value of all New York Stock Exchange, American Stock Exchange and Nasdaq issues, ended the week at $9.384 trillion, off $5.950 billion from the previous. A year ago, the index was $11.407 trillion.