“The stock market’s decline is suddenly seeming a lot more painful than it did even a few weeks ago,” writes E.S. Browning in today’s Wall Street Journal.

“For a long time since stocks started to turn down, investors have been able to reassure themselves. Sure, things are bad, but they were so good for so long that a slowdown was inevitable. For many who made out bigtime in the boom, the drop in the market pinched paper profits but didn’t affect their lifestyle.”

“That’s changing. While Wall Street so far has avoided the huge, headline-grabbing swoon of other serious slumps, the pain from this decline has begun to bite in a very real way. The Nasdaq Composite Index recently slipped below the level where it stood when tech stocks began their remarkable climb five years ago. So not only are the profits of the boom evaporated, some of the seed money is, too.”

“The damage isn’t limited to tech stocks. Diversified mutual funds, long seen as relatively safe havens, are also shriveling. Investors who put $10,000 into a U.S. mutual fund in early 2000, near the market peak, would today be an average of $2,200 poorer, according to industry tracker Morningstar Inc.”

“The seemingly endless string of accounting scandals has shaken investors’ confidence so much that some now doubt the market’s ability to rebound in a lasting way. Of course, given the perverse way markets have of surprising people, all this negativity could mean things are setting up for a rally. But the mood showed no sign of lifting Wednesday, as the major indicators plunged again. The Dow Jones Industrial Average fell 282.59 points, or 3.1%, to 8813.50. The Nasdaq dropped 2.5% to 1346.01, and the S&P 500 was off 3.4% to 920.47, its lowest level in four years.”

“For anyone tied to this market, the effects of souring stocks are broad and deep, and they can help shape spending and the economy. Among those reeling are an early retiree whose savings are dwindling; a man who quit work to trade stocks and now is looking for work again; a once-courted, now-fired junior investment banker; a struggling broker; and the head of a family company that suddenly found credit hard to come by.”