BEARING DOWN; INDEXES FALTER : DOW'S DIP HERALDED MONTHS AGO.

Byline: Ben Sullivan Daily News Staff Writer

For several broad indexes of the U.S. stock markets, Thursday's 4 percent drop of the Dow Jones industrial average was a case of been-there-done-that.

Sure, the Dow has lost just over 12 percent of its value since peaking in late July. And the Standard & Poor's 500, another widely cited market index, has roughly mirrored the Dow, off 12.55 percent in the same period.

But step back and the carnage from recent sell-offs is far more apparent and widespread.

``Under most circumstances, the S&P 500 is a fair indicator of the overall market,'' said James Gipson, manager of the $973 million Clipper Fund based in Beverly Hills. ``So far this year, that has not been the case.''

Take, for example, what's happening in the small-capitalization arena.

The Russell 2000, which tracks 2,000 small-cap companies with an average market capitalization of $400 million, is in full-bear mode, having lost more than 25 percent of its value since peaking as far back as April. By definition, a market or index is considered to be a ``bear'' if it is off at least 20 percent from its peak.

``Investors around the world have been getting much more risk-averse,'' said Tamoko Iwakawa, a vice president and foreign-exchange adviser at Union Bank of California. Money has been flowing away from stocks in general and toward safer securities such as bonds, Iwakawa said. That phenomenon only has been magnified for smaller firms.

Likewise, some regional indexes have been disproportionately affected by market corrections. The Daily News/Bloomberg Index, which tracks 50 of the largest companies headquartered in the San Fernando Valley and neighboring communities, is less than one half-percent away from bear market status, down 19.53 percent since its all-time high April 22.

Fifteen of the companies in the index have lost one-third or more of their value in that time, and five - including Foundation Health Systems Inc. of Woodland Hills and North American Scientific Instruments of North Hollywood - have fallen by 55 percent or more.

Alan Edrick, North American's chief financial officer, said he thinks the 63 percent decline in the company's stock price doesn't reflect the company's actual performance. ``The fundamentals are unchanged,'' Edrick said. ``I believe we're in the strongest position the company's ever been in.''

If history is any judge, it could take a year or more for the small-cap companies suffering this year to regain the lost ground. In its 1987 and 1990 bear markets, the Russell 2000 index took 11 months and 24 months respectively to reach its previous highs.

But some believe the current bear in the small-cap arena could live longer than its predecessors. Even with the corrections, ``valuations today are the highest in the history of man,'' Gipson said.

``We've got some of the lowest dividend yields and highest (price to earning) ratios ever. The fact that a stock is down doesn't mean it's cheap. It just means somebody lost money holding it.''

Other major indexes have fallen past the ``correction'' standard of 10 percent and are heading toward ``bear'' territory as well.

The NYSE composite, made up of the 3,000 or so companies traded on the New York Stock Exchange, has fallen nearly 14 percent since July.

The even broader Nasdaq composite index, which includes the 5,215 companies traded on the Nasdaq stock exchange, has lost more than 16 percent of its value since July. Heavily weighted toward technology issues, the Nasdaq has borne the brunt of the Asian currency crisis in the United States, with its members finding it hard to sell computers, electronic components and specialized software to countries like Indonesia, Korea and Thailand.

INVESTORS' OUTLOOK

CORNEL DINESCU

North Hollywood resident, 29, accounts payable clerk.

``I'm in it for the long term. I have to wait until it picks back up and then do some trading. Right now it's not too good.''

BRIAN BREGMAN

Sherman Oaks resident, 34, small-business owner.

``I pay attention to what's happening in the stock market. No one likes the fact that the market is going down drastically. But if you look at history, the market has gone up at a steady pace. I don't think it's necessary to panic at this point, particularly if you're in it for the long haul.''

BARBARA BYTNAR

West Hills resident, 50, hair dresser.

``I'm not worried about it. I believe the stock market will go up again. When I invested I did it as a long-term thing. I'm not a heavy-duty investor, I'm not panicky at all. Even if it goes down, it'll go back up later.''

ROBERT G. KLEIN

Van Nuys resident, 47, lawyer

``I don't get too nervous about it. I invest in good companies for the long term, so I'm not interested in short-term fluctuations. So the fact that the stock market turned down 357 points doesn't really affect any decision I'll make in the future.''

TAKING IT ON THE CHIN

The Daily News/Bloomberg Index, which tracks 50 of the largest publicly traded companies in the Valley area, has lost 19.57 percent of its value since April 22. Here's a company-by-company breakdown:

COMPANY THURS. CLOSE 4/22 CLOSE PCT. CHANGE

Xircom Inc. $21.84375 $16.1875 +34.94

Amgen Inc. $67.75 $57.25 +18.34

Eltron Intl. $28.625 $24.375 +17.44

Vitesse

Semiconductor $31.75 $28.625 +10.92

MiniMed Inc. $57.6875 $52.50 +9.88

K-Swiss Inc. $22.125 $21.75 +1.72

On Assignment $33 $32.50 +1.54

Special Devices $34.875 $34.75 +0.36

Syncor Intl. $17.125 $17.25 -0.72

Superior National $19 $19.75 -3.80

Tekelec $21.625 $22.5625 -4.16

Cherokee Inc. $9.875 $10.325-4.82

Dole Food Inc. $45.0625 $48.325 -6.85

Highland Bancorp $39 $42.25 -7.69

Whittaker Corp. $13.50 $14.875 -9.24

Newhall Land $26.6875 $29.5625 -9.73

IHOP Corp. $40 $44.625 -10.36

20th Century $24.875 $28.25 -11.95

Public Storage $26 $30.50 -14.75

Zenith National $24.75 $30.25 -18.18

Countrywide Credit $40.9375 $51.1875 -20.02

THQ Inc. $14.1875 $17.96 -21.00

Litton Industries $49 $62.3125 -21.36

Walt Disney Co. $31.50 $40.67 -22.54

Wellpoint Health $54.5625 $71.875 -24.09

Align Rite Intl. $12.875 $17 -24.26

Guitar Center $21.125 $29.875 -29.29

Cheesecake Factory $18.25 $26.25 -30.48

Pinkertons Inc. $15 $21.75 -31.03

Semtech Corp. $16.375 $23.875 -31.41

Haskel Intl. $7.25 $10.625 -31.76

Superior Industries $22.675 $33.1875 -31.83

Unico America $10.75 $16 -32.81

Panavision Inc. $17.375 $26 -33.17

Xylan Corp. $19.375 $29 -33.19

Unilab Corp. $1.8125 $2.75 -34.09

Cohr Inc. $4.50 $7.125 -36.84

3D Systems $7.25 $11.75 -38.30

Electro Rent $13.50 $24.375 -44.62

Brilliant Digital $2.1875 $4 -45.31

Four Media Co. $5.125 $9.75 -47.44

MRV Communications $14.375 $27.875 -48.43

Chad Therapeutics $3.75 $7.3125 -48.72

Diodes Inc. $5 $9.75 -48.72

Golden State Bancorp $17.875 $34.92 -48.82

Jerry's Famous Deli $0.9375 $2.09375 -55.22

PacificAmerica Money $8.75 $22.75 -61.54

ACT Networks $5.50 $14.625 -62.39

North American

Scientific $8 $21.75 -63.22

Foundation Health $10.5625 $29.1875 -63.81

CAPTION(S):

4 Photos, 2 Boxes

PHOTO (1--Color) DINESCU

(2--Color) BREGMAN

(3--Color) BYTNAR

(4--Color) KLEIN

BOX: (1) INVESTOR'S OUTLOOK (See text)

(2) TAKING IT ON THE CHIN (See text)