NEW YORK — Wall Street's huge plunge this past week showed that investors had finally become vulnerable to major economic problems and the struggles of the housing and lending industries — and that they had also developed a new respect for risk that had been absent in the stock market for some time.

Worries about the housing market, available credit to finance takeovers and the overall economy — concerns that had little lasting impact on stocks in the past — finally had investors selling Thursday and yesterday.

In the often contrarian view of Wall Street, analysts feel this sudden downturn might be just what the market needed to carry it higher.

"What we saw was a convergence of fears that created its own momentum, especially because of housing and credit tightening," said Joseph Quinlan, chief market strategist at Bank of America. "But, I think that's healthy; it puts a good base under the market that will help us push higher."

Trading next week should help analysts and investors determine if this past week's slide was the beginning of a correction, defined as a 10 percent dip for stocks. The Standard & Poor's 500 index, the market index market professionals watch because of its broad swath of companies, only dipped 2.33 percent Thursday, then shed 1.60 percent yesterday.

But Quinlan and other investment advisers believe this time around the market might not need an overall double-digit drop to constitute a correction. It might actually be realized through drops in key sectors, such as housing and financials.

Financial stocks are often seen as the group that is out in front when markets move broadly higher, and the sector this year has been particularly hard hit. Faced with fears of a broader implosion from a slowdown in subprime and corporate lending, companies like Goldman Sachs Group Inc. and Citigroup Inc. have taken a tumble.

For instance, the AMEX Securities Broker/Dealer index is down about 5 percent this year — but has fallen 14 percent from its peak in June. Goldman Sachs, the nation's biggest investment bank, is down only 3 percent year-to-date but has plunged 18 percent from its market peak.

While a correction is possible, what appears certain is that Wall Street has returned to the kind of volatility that was commonplace in the 1990s.

The NYSE composite index, which represents only New York Stock Exchange-traded companies, has had 27 sessions so far this year where it has swung by more than 1 percent in either direction.

There was a total of 34 cases in all of 2006.

Go back to 1997 and there were 63 sessions of 1 percent swings, followed by 70 in 1998 and 77 in 1999.

Brett Hammond, chief investment strategist for TIAA-CREF, said this kind of volatility isn't a sign of some kind of market implosion. Instead, it could present opportunities for savvy investors.

"There's more of a chance to make smart stock picks that you can take advantage of," said Hammond, whose financial organization manages private pension funds. "This is something that markets do. I think the jury is still out over if what we've just seen is a fundamental change or not, but in reality this is really just a return to normalcy."