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Fears of another huge terrorist attack in the U.S. shrank after Independence Day on July 4. But terrorism is just one of many bearish factors affecting stocks.

Corporate accounting scandals are the biggest selling factor on the New York market. The Securities and Exchange Commission is cracking down.

Revealing accounting misdeeds is like taking out rotten apples from a box — favorable in the long term but disruptive in the short term.

Outstanding shares for margin selling have reached all-time highs. In the past month, the Dow Jones industrial average fell 7.5 percent, the S&P 500 fell 7.7 percent and the Nasdaq fell 12.8 percent.

If these indexes are to rebound, many hurdles must be cleared, including terrorism fears, the Middle East crisis, a fall in capital inflow, the dollar’s weakening, poor corporate performance and accounting scandals.

Since investors now distrust corporate information, it will take time before the direction of U.S. stocks is clear.

In Japan, banks’ unwinding of cross-shareholdings will quicken now that firms’ shareholders’ meetings are over.

In fiscal 2001, banks sold a record 5 trillion yen in stocks at book value to meet the requirement from September 2004 that their shareholdings not be larger than their capital. Banks are expected to sell an equal amount this fiscal year.

Companies are meanwhile buying back more of their shares, with about 1,020 firms announcing buybacks, worth 9.1 trillion yen, since April. Although firms intend to absorb the unwound cross-shareholdings, the buybacks may reach 2 trillion yen, or even 3 trillion yen at most, this fiscal year.

It is hoped that Banks’ Shareholding Acquisition Corp. will help absorb shares sold by banks. But the body has not been working well for either banks or firms because of its severe rules. For example, banks must contribute the equivalent of 8 percent of sold shares to the body each time they sell.

The Nikkei average will probably be supported at 10,074, the mark posted June 26, for now. But dipping below 10,000 is possible. If stocks plunge further, the government should act flexibly with the stock-buying body to shore up the market by cutting the banks’ contribution rate and taking other steps.

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