The S&P 500 index has dropped 8.8 percent from its Sept. 19 record high, and the move may well continue, says Jim Paulsen, chief investment strategist at Wells Capital Management.
He told
CNBC that the index might fall below 1,800 before rebounding. The S&P 500 was trading at 1,855 Thursday midday.
"I think until yesterday, this corrective process has been looked at more as a good thing, a healthy refreshing pause," Paulsen argued.
"That's certainly not how we feel this morning. . . . I think this thing is going to get a little scarier yet. We might end up in a full-blown 10 percent correction."
But the move also "gives you a sense that we're getting close to the bottom here," he stated, maintaining that a rebound is in the offing.
"It's time to start thinking on the other side of the equation that we get through this and think about where we might be a year or 18 months from now. You can get pretty excited about the prospects here," Paulsen noted.
"I do think we've got a little more carnage, a little more scare yet ahead of us in the next few weeks."
Many investors are now worried about fundamentals for stocks.
"There is a combination of concerns over the outlook for global growth and concerns on the outlook for inflation in the wake of a slew of negative data," Jeremy Batstone-Carr, head of research at Charles Stanley in London, tells
Bloomberg.
"There is the likelihood that third-quarter corporate earnings expectations which have already been lowered may very well be lowered again."