Investors are still feeling bearish about the stock market, evidenced by large outflows from domestic stock mutual and exchange traded funds. Recent evidence suggests that investors are staying on the sidelines not because of the market volatility, rather, due to deep mistrust of the stock market. [Tom Lydon Talks Markets and Investor Confidence on CNBC]

“American stocks have doubled in price since the market hit bottom three years ago. But trading in the United States stock market has not only failed to recover since the 2008 financial crash, it has continued to fall. By comparison, after the market busts of 1987 and 2001, trading recovered within two years. In fact, going back to 1960, trading had never declined for three consecutive years, let alone four and counting,” the editorial staff for The NY Times wrote.

“Investors are de-risking,” Tim Hoyle, director of research at Radnor, Pennsylvania-based Haverford Trust Co.said. “They look at a global situation that appears to be degrading, not improving.” [Despite Euro Fears, Stock ETFs are Not Dead]

As leading U.S. economic indicators have weakened and U.S. manufacturing data had a dismal forecast, nine out of ten S&P 500 groups fell. Overall, the S&P 500 has lost 3.9% over the past five days, reports Rita Nazareth for Bloomberg.

Around 16 Spanish banks had their ratings cut by Moody’s Investor’s Service due to economic stress and the government’s budgetary woes. Furthermore, the prospect of Greece exiting the Eurozone is also weighing on market sentiment. The Eurozone debt crisis is a huge catalyst for lower market sentiment and lack of investor faith in a turn around anytime soon.