NEW YORK, OCT. 9 -- The stock market plunged again today, producing a record-breaking week of losses that Wall Street watchers insisted was merely a correction, not a crash.

The Dow Jones industrial average dropped another 34.43 points, pushing the most closely watched stock market barometer down to 2482.21

For the week, the blue-chip indicator was down 158.78 points, breaking the record set the week ended Sept. 12, when it lost 141.03 points.

Since hitting a record high of 2722.42 Aug. 25, the Dow has lost 8.8 percent of its value as a result of the two record-breaking down weeks.

Broader market indexes also slipped today, indicating the declines were not a quirk of the not-infalible Dow Jones index. The New York Stock Exchange index fell 1.68 to 174.64 and Standard & Poor's 500-stock index fell 3.09 to 311.07. The price of an average share dropped 39 cents. Losers outnumbered gainers 1,069 to 488 among the 1,984 issues traded today.

For the week, the New York Stock Exchange index was down 8.79 to 174.64. The Nasdaq composite index of over-the-counter stocks was down 13.18 to 438.43 and the American Stock Exchange index fell 12.56 to 346.81.

Jitters about rising interest rates and inflation continued to plague the market, but much of this week's losses were blamed on a stock market newsletter that maintains that the market rises and falls on waves of optimism and pessimism.

The Dow Jones average suffered its worst one-day drop ever on Tuesday -- a 91.55 point plunge -- after a negative signal from Robert Prechter, who publishes a newsletter called the Elliot Wave Theorist and gives market advice in recorded phone messages from his home in Georgia.

In an interview with The Wall Street Journal Report television program to be broadcast this weekend, Prechter said he is advising his clients to "get out of stocks completely {because} the market is technically very weak. Right now, I prefer to put my money into Treasury bills."

Precther, who has predicted the Dow would drop to 2300 if it fell below 2700, said he may "start bargain hunting when the Dow drops another 100 points or so {which} will be the market low."

Despite his sell signal, Prechter reaffirmed his earlier long-term projection of a Dow that will reach 3600 by late 1988.

Other analysts also insisted the stock market was merely making what Wall Street calls a correction that would lead to higher prices later.

Corporate insiders are continuing to buy stocks in their companies, said Norman Fosback, who tracks insiders' investment reports filed with the Securities and Exchange Commission. "The latest reported insider trades reveal a renewed surge of buying by America's most knowledgeable and smartest investors," he said.

The half-point jump in banks' prime rate to 9.25 percent on Wednesday did not immediately depress prices on Wall Street, but was fundamentally not good news for stock prices, analysts said.

Equity investors are troubled by the high bond yields, which present "a really attractive alternative to stocks," said Hugh Johnson, head of the investment policy committee at First Albany Corp.

Investors are also worried about the impact of rising interest rates on the economy.

On the trading floor today, Varity was the most active NYSE-listed issue, rising 1/2 to 3 3/8. Telex followed, climbing 9 3/4 to 70 3/4 in heavy trading. Investor Asher Edelman launched a $65-a-share offer for the company. Chrysler was third, dropping 1 3/8 to 36 3/4.

Among blue chips, International Business Machines dropped 4 1/8 to 147 3/8, American Telephone & Telegraph eased 1/8 to 32 3/8 and General Electric fell 2 to 58 1/4.