“With big-picture issues like war and a weak economy looming over the stock market, you can’t blame investors for not focusing much on individual stocks,” writes Ken Brown in today’s Wall Street Journal.

“But that could leave them blind to looming problems inside many companies and industries.”

“The net result of the obsession with the overall shape of the world and the economy is that the market’s moves are having a greater impact on individual stocks than at any time since just after the 1987 stock-market crash, according to research by Credit Suisse Group’s Credit Suisse First Boston.”

“Put another way, the shares of individual companies are moving more in sync with the overall market and are less driven by stocks’ own fundamentals, indicating that fears about the fighting in Iraq and a potential double-dip recession rank higher than concerns about, say, earnings at a given company.”

“In some ways, the market is acting as a barometer of the national mood, as it often does during periods of anxiety. The last time the correlation between the overall market and individual shares turned sharply upward was during the Russian debt crisis in 1998.”

“Worries about a lengthy war pushed the Dow Jones Industrial Average down 376.20 points, or 4.4%, last week, making it the worst week for the market since mid-January — and an abrupt turnaround from the previous week’s rally.”

“On Friday, the Dow industrials fell 55.68 points to 8145.77, leaving it down slightly since the war began and down 2.3% for the year. Last week’s slide followed a surge in the Dow industrials of nearly 1,000 points during the eight sessions leading up to last week amid investor relief that at least the uncertainty about the war’s start date had ended.”

” ‘First it was anticipation of the war, then it was the war relief rally, now we think that [outlook] is going to start to break down,’ says Mika Toikka, a derivatives strategist at CSFB. ‘People are going to start to look beyond the war.’ “