A confluence of unexpectedly bad economic and business news sent the stock market tumbling this week to its worst loss in nearly two years.

A plummeting dollar, an outsized trade deficit, a record one-week surge in the money supply, the second consecutive monthly drop in the index of leading indicators and some disappointing corporate earnings reports heightened the concern of investors who were already apprehensive about the economic outlook.

Much of the bad news had been anticipated, though not its magnitude. But it was the announcement by Bethlehem Steel on Wednesday that it was cutting its quarterly dividend in half due to poor earnings that caught the market completely by surprise and was largely responsible for teh 19.75 point drop in the Dow Jones average that day which highlighted the week's decline.

For the week, the market dropped 33.35 points on the Dow to close at 890.07. Miniscule advances eked out on Thursday and Friday did little to counter earlier losses, but they encouraged market analysts to believe that the market slide has been stemmed for the time being.

The last time the market experienced a drop of this size was the week of Dec. 5, 1975 when the Dow average lost nearly 42 points.

Analysts, who have found it more and more difficult to hang on to their optimism in the face of this year's dreary market, still largely believe that stocks remain in a temporarily stalled by bull market.

But they say it will take a positive development like a sustained slowing of the inflation rate or a boost to business and investment in the tax proposals that the Carter administration intends to present to Congress in September to prod the market forward once more.

Donald Hahn, who directs portfolio strategy at Becker Securities Corp., said his firm thinks "the post 1974 bull market is still intact and will extend to 1979," but was bearish on the outlook for the next six months. But he predicted that the market will not go below 850 on the Dow.

"Investors are not only anticipating all possible bad news, but they are anticipating a lot of things that aren't going to happen," Hahn said. What they should start anticipating, he added, is some good news on the inflation front. He expects a secular down-turn in commodity prices to manifest itself and that the President's tax proposals "could turn out to be very favorable to the business and investment community."

Meanwhile, the continued plunge of the dollar this week against other currencies raised concern about the inflation outlook since a cheaper dollar means imported goods like foreign petroleum will be more expensive. This record June trade deficit of $2.82 billion did nothing to alleviate this concern.

There was also fear that the Federal Reserve Board, in an attempt to defend the dollar, will push up shortterm interest rates temporarily in order to attract funds into the United States.

Fed Chairman Arthur Burns testimony to Congress today that the fed is lowering its growth target for the money supply, coming on top of the record $5 billion jump in the nation's basic money stock last week, underlined the concern about higher interest rates.

And the 0.6 drop in the government's index of leading indicators for June was larger than expected and followed a decline in May bolstering those analysts who believe the economy may be in for a major slowdown during the second half of 1977, or a recession next year.

Richard B. Hoey, economic analyst for Bache Halsey Stuart Shields Inc., however, noted that the declines in the index " have been very hestitant and I wouldn't take that as predicting a recession in 1978."

Instead, he said the economy was probably going through "an inventory minicycle" as businesses try to get inventories, which have been building up recently in relation to flat sales, back in line.

"There are not enough excess inventories to generate a sustained downturn, but enough to contribute to a slowing of the economy for two or the economic recovery somewhat self-the econmic recovery somewaht self-correcting, and in terms of the probable length of the recovery, that's good."

Leon G. Cooperman, chairman of the investment policy committet at Goldman, Sachs & Co. said investors "want some long-term direction from the administration and Congress" before they take advantage of what he believes are some bargain-priced investment opportunities. By historical standards.

"There is an unwillingness to step up and take a long-term view because the long-term view is uncertain," he said. "What investors want are some specific programs from the administration and Congress to enhance capital formation, improve the profitability of industry, and some long-term direction in energy policyso they can figure out the energy supply situation."