By Clyde Noel

Stock Report

If you have been a “buy and hold” investor you are having your head delivered to you on a platter. Last week was the fifth straight week of losses on the market.

Early Monday morning stocks relinquished more ground, with investors unable to shake off fears about the economy, terrorism, lower earnings, corporate accounting and violence in the Middle East.

Will this week be the long-awaited capitulation? As the market keeps tumbling, investors are trying to figure out when we’ll get that one big last wave of selling.

Don’t hold your breath! According to some astute analysts, the capitulation low will be around 8,500 on the Dow because valuations are still too high and volume is still low.

A number of things weigh heavy on the market, but the foremost is fear of terrorism here and abroad.

Last week’s announcement of tanker trucks being purchased to assault synagogues was another fear for investors.

Another reason for the market’s downslide: Asian and European investors are taking their money home because they are nervous we are going to get hit with another terrorist scare or an actual attack.

The Dow is now down more than 700 points or 7.6 percent since Jan. 1. The Nasdaq is down more than 26 percent since Jan. 1. The Town Crier index is now down 21 percent since Jan. 1, and the loss is now close to $11,000 on the initial $50,000 investment.

Biggest losers for the year on the Town Crier “50″ are: Apple Computer, down 23 percent; Cisco Systems, 24 percent; E-Trade, 52 percent; Harmonic, 71 percent; Intel, 40 percent; Legato, 69 percent; LSI Logic, 46 percent; Nvidia, 66 percent; Rambus, 52 percent; Sun Micro, 55 percent; and Veritas, 54 percent.

The Standard and Poor’s 500 index, a measure of the broad market’s overall health, is in danger of achieving its first three-year losing streak in 60 years. It’s down 12 percent this year.

In 2001, it was down 13 percent and down 10 percent in 2000.

Pulling out of the stock market is out of the question for many investors because when conditions improve the market will take off.

It’s still time to diversify because the more stocks you own the less exposed you become when one company reports bad news such as accounting blowups.

The market is still the place to be unless you want to check your savings account at the local bank and notice you are receiving less than 1 percent while good utilities like Southern Company are paying 4.9 percent and General Electric yields 2.5 percent on the investment.

Although it’s painful to look at your declining portfolio, stocks are still the place to be. Under normal conditions, over time, you are in an investment that averages better than 10 percent a year.

Noel, a seasoned investor, covers the stock market for the Town Crier.