These Days, It Ain't Over Till...

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Further pounding home the lesson that nothing matters in the markets these days until the final hours, the major indices today turned on a dime at 2 p.m. EDT and turned losses into a slightly up finish.

The

Dow Jones Industrial Average

was down more than 84 points around 2 p.m., just dipping below the 7700 level. That test triggered a flurry of buying that ended with the Dow up 5.11 to 7787.33. The broader

S&P 500

, down more than 9 at its worst, eked out a gain of 0.68 to 913.70. The tech-paced

Nasdaq Composite Index

fell as low as 1583 intraday but closed up 4.24 at 1595.54.

There seemed to be little fundamental underpinning for the swing upward -- hardly a surprise as vacation-denuded trading floors remain quiet on the downward slope toward Labor Day. Bonds strengthened slightly today but didn't vary much throughout the session, with the yield on the bellwether 30-year Treasury easing to 6.65%. The dollar rose fractionally against the German mark and the Japanese yen, but as with bonds, there was no midafternoon shift to spur stock investors.

Market breadth was positive as volume stayed well off its accustomed pace. On the

New York Stock Exchange

, 1,627 advancers beat 1,167 decliners on volume of 493.8 million shares. Nasdaq advancers led decliners by 2,347 to 1,898 on 644.5 million shares.

Gail Dudack, the bearish market strategist at

UBS Securities

, wasn't too excited about making a prediction on this muddy market's likely path forward. "I think anybody could make a guess, but the only way anyone will know is when the markets retest the old highs, which markets almost always do," she said.

That retesting of highs should come once September blows Wall Streeters in from the beaches, Dudack said. "Clearly August has been a correcting month," she said. "I'm a skeptic, but I'm willing to let the market prove me wrong."

Dudack said market watchers should look out for certain telltale signs in any autumn market recovery: increased trading volume, solidly positive breadth and clear leadership among industry groups. "If we get back to

Dow 8250 and we see good volume, breadth and leadership, we can say this was just another mini-correction," she said.

*****

The two days ended Tuesday saw an estimated $600 million in net outflows from U.S. equity mutual funds, reversing the strong inflow trend seen last week, according to

Mutual Fund Trim Tabs

. Forty-one managements had redemptions, 25 were flat and 27 received net new cash,

Trim Tabs

said. That's a sharp contrast with the three days ended Thursday, when U.S. funds lured an estimated $6.3 billion as 51 managements gained net cash, 20 were flat and 21 had redemptions.

Wednesday's market action

(earnings estimates from

First Call

):

Deepwater drillers flourished after a record number of bids were entered in yesterday's Gulf of Mexico lease sale.

Diamond Offshore Drilling

(DO) - Get Report

gushed up 3 3/4 to an all-time high of 51 1/8,

Transocean Offshore

(RIG) - Get Report

rose 4 11/16 to an all-time high of 93 9/16,

Reading & Bates

(RB)

gained 1 3/8 to an all-time high of 35 1/2 and

Falcon Drilling

(FLC) - Get Report

added 1 1/4 to 30 7/8. The shallow-water driller

Cliffs Drilling

(CDG)

didn't share in the party, shedding 1 15/16 to 48 7/8.

Besides deepwater drillers, big oil producers also shone.

Deutsche Morgan Grenfell

raised the integrated oil sector to overweight from underweight and upgraded

Chevron

(CHV)

to buy from hold. Chevron gained 1 11/16 to 79 15/16,

Texaco

(TX) - Get Report

rose 2 to 117,

Exxon

(XON) - Get Report

rose 1 1/2 to 63 1/4 and

Atlantic Richfield

(ARC) - Get Report

was up 1 3/8 to 76 9/16.

Allergan Ligand

(ALRI)

leapt 1 7/8, or 10.3%, to a post-offering high of 20 3/8 on reports that it would seek quick approval for a Kaposi's sarcoma drug that has performed well in trials. The company is a joint venture of

Allergan

(AGN) - Get Report

, which was up 5/16 to 32 7/16, and

Ligand Pharmaceuticals

(LGND) - Get Report

, which moved up 7/8 to 14 3/4.

Harshly on the downside in the drug-development business was

Connectics

(CNCT)

, which collapsed 4 1/8, or 45.2%, to an all-time low of 5 1/16 after it suspended plans to submit a biological license application for a dermatitis treatment.

Vector Securities

downgraded the stock to neutral from attractive.

Ceridian

(CEN) - Get Report

slumped 5 15/16, or 13.8%, to 37 1/16 after saying late

yesterday that it plans to sell its

Computing Devices International

unit.

Smith Barney

downgraded the stock to neutral from buy.

Savannah Foods

(SFI)

jumped 2 1/2, or 16.6%, to 17 9/16 after

Imperial Holly

(IHK)

made an unsolicited offer to buy the company for $18.75 per share, or $496.9 million, in cash and stock. Imperial Holly advanced 11/16 to 15 1/4.

Columbia/HCA Healthcare

(COL)

slipped 1/2 to 32 after

Morgan Stanley Dean Witter

downgraded the stock to outperform from strong buy. The firm took the same action on

Quorum Health Group

(QHGI)

, sending it down 1/4 to 33 7/8.

Tenet Healthcare

(THC) - Get Report

declined 7/16 to 27 1/2 even though Morgan Stanley upgraded it to outperform from neutral.

Superior Telecom

(SUT)

bounded 3 5/8, or 10.5%, to an all-time high of 38 1/8 after reporting late yesterday first-quarter earnings of 74 cents per share, 8 cents ahead of the four-analyst consensus estimate and up from the year-ago pro-forma 50 cents.

Hudson Foods

(HFI)

extended its recovery from its tainted-beef travails, rising 1 1/4, or 8.3%, to 16 3/8 after

Merrill Lynch

upgraded the stock to near-term accumulate from hold. Merrill maintained a long-term buy rating.

Union Pacific Railroad

(UNP) - Get Report

fell 1 3/4 to 66 1/2 amid a federal safety probe that has intensified after yet another major accident.

Delta Air Lines

(DAL) - Get Report

skidded 1 11/16 to 86 1/4 on reports that the airline's pilots plan to ask for a midcontract pay hike. Other airlines were mixed, as

American Airlines

parent

AMR

(AMR)

fell 1 3/8 to 104 1/4 and

US Airways

(U) - Get Report

fell 1 1/4 to 34 5/16 while

United Airlines

parent

UAL

(UAL) - Get Report

crept up 3/16 to 77 15/16 and

Southwest Airlines

(LUV) - Get Report

added 5/16 to 28 7/8.

Adtran

(ADTN) - Get Report

gave up 4 1/4, or 9.7%, to 39 9/16 after

Goldman Sachs

downgraded the stock to market outperform from trading buy.

BEA Systems

(BEAS)

dropped 1 3/4, or 8.1%, to 19 3/4 after reporting worse-than-expected second-quarter results late yesterday.

Robertson Stephens

upped its fiscal 1998 and 1999 earnings estimates on the company.

Baan

(BAANF)

declined 3 7/16 to 62 3/4 after Salomon Brothers downgraded the stock to hold from buy.

Two photomask companies went in different directions after

Cowen

started both at strong buy.

DuPont Photomasks

(DPMI)

improved 1 7/8 to 66 1/4 but

Photronics

(PLAB) - Get Report

surrendered early gains and lost 5/8 to 60.

Caliber System

(CBB) - Get Report

hopped 3 to 41 7/16 after Morgan Stanley reiterated an outperform rating.

Argentine beer and mineral water company

Quilmes

(LQU)

bounced 5/8, or 13.5%, to 5 1/4 after Salomon Brothers resumed coverage at strong buy. The firm set a 12-month price target of 8 on the stock.

Biomatrix

(BIOX) - Get Report

gained 2 5/8, or 8.8%, to an all-time high of 32 7/8 after

Ladenburg Thalmann

initiated coverage at buy with a 12- to 18-month price target of 48.

Concentric Network

(CNCX)

rose 3/4 to 14 1/8 after UBS Securities initiated coverage at strong buy, setting a six- to 12-month price target of 18.

Total Renal Care

(TRL)

climbed 3 3/16 to 46 13/16 after acquiring six new dialysis centers, serving more than 1,000 patients in Detroit, Chicago, Washington and Whittier, Calif.

ADE

(ADEX)

lost 1 5/8 to 42 7/16 after

Sutro

downgraded the stock to hold from buy.

Pimco Advisers LP

(PA)

improved 2 1/16 to 29 3/8 on an upgrade to near- and long-term buy at Merrill Lynch. Merrill had rated Pimco near-term accumulate and long-term neutral.