"The shift from a cyclical, almost inflation-driven mindset to one that is defensive with slower growth has put the commodity producers in the leadership role to the downside," said Ned Riley, chief investment officer of Riley Asset Management in Boston. "That masks the fact that the companies with more stable growth, that are less dependent on price increases, are going to eventually be the market's new leadership."

In an otherwise excruciating week for stocks, the exchange-traded fund that tracks the healthcare issues of the Standard & Poor's 500 posted a 1.18 percent gain, the only sector to show a positive return. Overall, the index shed 3.27 percent for the week and is now down 5.72 percent for the year. The week's worst-performing sectors were energy and materials, which sank 6.93 percent and 8.3 percent, respectively.

At the root of at least some of the market's anxiety is the thought of less-robust growth in consumer spending, illustrated by disappointing retail sales for March. This was partly chalked up to higher fuel costs. But even the sagging price of oil, now trading at a two-month low, failed to reassure investors, who remained firmly focused on their fears of slower growth for the rest of 2005.

It's not surprising that investors have turned defensive, said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co. They have so many unanswered questions. How aggressive will the Federal Reserve be as it tightens interest rates? What impact will rates have on the economy? How will energy costs affect consumers? What does the corporate profit picture hold?

"And now they're believing that we are entering a period of economic slowdown. This is where it gets difficult," Battipaglia said. "No one would argue the economy is simmering down. But how far down it simmers is the major question."

In 2004, the second year of the recovery since the bear market, investors benefited from a 4 percent rate of growth in gross domestic product; this year, most think it will be about 3 percent. But while the pace of economic growth is slowing, there are still good fundamental underpinnings, including relatively high levels of employment and continued wage gains.

The market may be overreacting to the prospect of slower growth in consumer spending, analysts said.

Interest rates also remain favorable. Short-term rates currently stand at 2.75 percent, and the Fed is expected to proceed with incremental increases of 0.25 percentage points each. And receding inflation concerns sent mortgage rates down for a second straight week.

It's clear investors are looking for alternatives, but it's difficult to find opportunities in a sea of downward-pointing red arrows. For now, volatility is to be expected as large market players — hedge funds and options traders — scramble to cover the hefty bets they made on commodities.