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Dark Cloud Still Casting a Pall on Wall Street

The stock market is never perfect, but it's getting closer and closer to being correct.

With a decline of 58.30 to 7660.98 in whipsaw trading session, the

Dow Jones Industrial Average

stands 7.2% below its Aug. 6 record high of 8259.31. That's short of the 10% so-called correction level, but look intraday: At its session low, around 12:40 p.m. EDT, the Dow was off 138.43 to 7580.85 -- 8.2% lower than the record.

The broad

S&P 500

gave up 6.44 to 912.59, and the small-cap

Russell 2000

, off 0.97 to 435.93, made it back-to-back losses after its nine-session win streak. But not all was lost -- the tech-fat

Nasdaq Composite Index

managed to push just above break-even, adding 0.61 to 1639.86.

"There was a little attempt at a rally," said Doug Myers, a trader at

Interstate/Johnson Lane

in Atlanta. "They rallied the Nasdaq. Although it wasn't much of a rally, the

Nasdaq 100

was up 2 points, so there was a little bit of a silver lining to the dark clouds that's been hanging over the equity markets."

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Still, that cloud seems more entrenched than the overcast weather system that's darkened the Financial District most of the day. "I think there's just a general mood, a pall over the Street that short-term things are going to trend lower," Myers observed. "Now, that's an opportunity for people who want to come in, but it's going to take some intestinal fortitude."

Market internals showed active participation today, with 579.7 million shares changing hands on the

New York Stock Exchange

and 718.6 million shares moving on the Nasdaq. Decliners beat advancers on both major markets, by 1,759 to 1,076 on the Big Board and by 2,293 to 2,044 on the Nasdaq.

The market's next focal point, of course, is 8:30 a.m. EDT tomorrow -- release time for the August retail sales and Producer Price Index reports. To a marketplace starved for direction, these data are crucial in forming a base for trading decisions -- at least for a day or two. The bond market dimmed in advance of the figures, with the yield on the bellwether 30-year Treasury rising to 6.69%.

*****

Estimated net new cash flow to stock mutual funds dipped to $13.5 billion in August from $26.6 billion in July, according to the

Investment Company Institute

. "The estimated slowing of flows likely reflects the volatility of the stock market during the second half of the month," ICI said.

Bond and income funds saw a reversal of fortune, pulling in an estimated $6.5 billion in August versus the actual $4.2 billion in July, ICI found. But the institute pointed out that the August estimate "includes sizable conversions of bank trust assets to mutual funds. Excluding the conversions, the estimated flow in August was slightly lower than July's net new cash flow."

Thursday's market action

(earnings estimates from

First Call

):

Motorola

(MOT)

plummeted 8 3/8, or 11.3%, to 66 in late trading after its post-close announcement that third- and (probably) fourth-quarter earnings will miss consensus estimates. Motorola cited its decision to phase out its Macintosh clone business now that

Apple

(AAPL) - Get Apple Inc. Report

has opted to stop licensing its technology, as well as weakness in its paging business. The 29-analyst third-quarter estimate was 60 cents per share versus the year-ago 34 cents, and the fourth-quarter outlook called for 85 cents versus 39 cents.

Immunex

(IMNX)

rocketed 12, or 27.4%, to an all-time high of 55 7/8 after saying a Phase III trial of its Enbrel rheumatoid arthritis drug confirmed its effectiveness.

American Home Products

(AHP)

, majority owner of Immunex, rose 9/16 to 73 11/16.

Centocor

(CNTO)

, which is developing a competing treatment, slipped 3/16 to 45 1/16. (

TheStreet.com

looked at Immunex's prospects in a

story today.)

Going the other way,

Matrix Pharmaceutical

(MATX) - Get Matson, Inc. Report

collapsed 1 7/8, or 27.8%, to an all-time low of 4 7/8 after saying late yesterday it had indefinitely halted development of its AccuSite Injectable Gel for genital warts.

BET Holdings

(BTV)

jumped 10 1/2, or 25.6%, to an all-time high of 51 1/2 after Chairman and CEO Robert Johnson and

Liberty Media

(LBTYA) - Get Liberty Global Plc Class A Report

offered $48 per share for the shares of BET they don't already own.

Lernout & Hauspie Speech Products NV

(LHSPF)

surged 7 7/8, or 24.8%, to a 52-week high of 39 7/8 after

Microsoft

(MSFT) - Get Microsoft Corporation Report

bought an 8% stake in the company for $45 million.

Corning

(GLW) - Get Corning Inc Report

lost 5 7/16, or 11.5%, to 41 15/16 after warning that it expects to report 1997 earnings 10 cents to 15 cents per share lower than previously expected. The seven-analyst consensus expectation was $2.04 versus the year-ago $1.50.

AccelGraphics

(ACCL)

plunged 1 15/16, or 24.6%, to 5 31/32 after saying it expects to report a third-quarter loss of 7 cents to 9 cents per share. The five-analyst forecast called for earnings of 5 cents; the company, which went public in April, did not report its earnings last year.

Ascend

(ASND) - Get Ascendis Pharma A/S Report

descended 2 1/8 to 37 13/16 on a slew of negative analyst actions.

Salomon Brothers

cut the networker to hold from buy;

Goldman Sachs

trimmed third-quarter, fourth-quarter and 1998 estimates; and

Hambrecht & Quist

cut third-quarter and 1997 estimates.

Go-go chip equipment maker

Rambus

(RMBS) - Get Rambus Inc. Report

tumbled 4 5/8 to 65 5/8 after lead underwriter

Morgan Stanley Dean Witter

released 1 million shares from the company's post-offering lockup.

Rohr

(RHR)

gained 11/16 to an eight-year high of 28 1/2 after confirming it is in talks to be acquired. The company traded as high as 33 3/8 when the merger talk was just a rumor. Rohr said the unnamed party in the talks would value Rohr at $790 million.

@Home

(ATHM) - Get Autohome Inc. Report

tacked on 1/2 to 19 9/16 after

C/Net

(CNWK)

agreed to provide the company with access to programming, high-speed software downloading and other content. C/Net dipped 2 3/4 to 35 3/4.

A day after the NYSE asked in vain for the company to explain the recent upswing in its stock,

Lone Star Technologies

(LSS)

shot up 3 5/16 to an all-time high of 46 5/16.

Medtronic

(MDT) - Get Medtronic Plc Report

declined 2 5/16 to 91 1/8 after a lawyer initiated a complaint with the

Food and Drug Administration

, charging that Medtronic did not comply with FDA labeling requirements and misled the agency in its reporting on its leads for spinal cord stimulators.

Telebras

(TBR)

fell 2 15/16 to 90 1/4,

Honda Motor

(

(HMC) - Get Honda Motor Co. Ltd. Report

HMC ADR) fell 1 1/8 to 62 1/2 and

Nippon Telegraph & Telephone

(

(NTT)

NTT ADR) fell 1 5/8 to 45.