Yes, stock markets have adverse effects on the economy. For the simple reason, all stock markets (I know of) today violate the most fundamental free-market principles, the faith in a purported valuation of a stock bearing no resemblance to the actual value of the company. And any such popular hedging on valuations that takes money away from the pursuit of real societal value yields a larger hydrocephalous of finance 11 times the size of production as a contribution to GDP than we already have in the United States.
Moreover, a company selling the stock is held accountable by artificial milestones dreamed up by oligarchically-chosen analysts turned self-appointed arbiters with their target price-points as relevant in practice as, say, common-core is the appropriate measurement of the education of your child. Not at all, I hasten to say, as no company (or child for that matter) going through its paces will grow linearly equal. Any market, like the stock market as we know it today, that violates free-market principles is an inaccurate representation of reality, by definition. And cannot and should not be expected to contribute favorably to a renewable democracy.
Feast your mind on those two arguments first. There are many more salacious consequences from the pretense of stock-markets portraying to be free-markets. I covered the subject on a blog I wrote in 2013: NYSE Euronext’s Free Market Fallacy.