dol drumsnoun plural probably akin to Old English dol foolish
1: a spell of listlessness or despondency
2: a part of the ocean near the equator abounding in calms, squalls and light shifting winds
3: a state or period of inactivity, stagnation or slump
4: the stock market in late summer

Ah, the joys of late summer. Corn on the cob.

Yankees

games. Walking on the white lines in the beach parking lot to avoid scorching your feet. And, if you work on Wall Street, trying not to fall asleep at your desk.

It's not your fault -- as soon as the second-quarter earnings season folds its tent in late July, trading in stocks tends to slip into low gear until after Labor Day. For all kinds of reasons. With all the investment bankers hanging out in tony towns that smell of Coppertone and money, the merger-and-acquisition business dries up. Stock analysts and strategists, too, lie low, as do money managers -- at least managers who are putting in good years -- so there aren't many new ideas getting kicked around.

Meanwhile, as volume dries up, investors start to think about what a troubled time fall has been for the stock market, and they quite understandably (if not rationally) begin to get uncertain. That uncertainty dries up volume further, which gives rise to more uncertainty, and so it goes until the floor of the

New York Stock Exchange begins to seem as quiet as the nave of a church.

And there are signs that this late-summer funk is hitting Wall Street again. Although volume has actually been pretty solid of late, it has been nearly two weeks since the market, whether you measure it by the

Dow Jones Industrial Average, the

S&P 500 or the

Nasdaq Composite Index, has been able to put together two straight days of gains. On a number of recent mornings (including Friday), sellers have faded what looked like good openings, sending the market back to the flatline or, worse, into the red. Active money managers complain that things are too unstable to hold anything overnight.

"People are cautious and they don't know what to do," says Jim Volk, co-director of institutional trading at

D.A. Davidson

in Portland, Ore. "The bias is to the downside when people are uncertain."

Where that uncertainty rests is something of a moving target. Last summer it was worries over the

Fed raising rates, with a dash of Y2K-related fears. (Remember Y2K? Anyone?) This year, it's jitters over earnings growth.

Doleful, Dolorous -- Summertime!
Dow Jones Industrial Average
and Nasdaq Composite Index, 10 days

Concern over what third-quarter earnings will look like is obviously not an idle worry. Several high-profile companies, most recently

Nokia

(NOK) - Get Report

, have warned that business looks slower. Across the market, analysts' estimates have been coming down.

"For the third quarter and the year-end there has been a lot of trimming," says Joseph Kalinowski, equity strategist at earnings tracker

I/B/E/S

. "I'm seeing a lot of estimates coming down."

Slower earnings growth certainly doesn't augur the end of the world. "In the last five years, except for last year, heading into the second half, estimates have been too high," points out Charles Crane, market strategist at

Spears Benzak Salomon & Farrell

. "Despite that, stocks have done OK."

Nevertheless, Crane reckons that, as estimates get revised downward, the market will need to come to terms with growth that is no longer white-hot. Many investors, seeing the S&P 500's year-on-year gains in excess of 20% over the last few quarters, may have made the mistake of extrapolating a trend that is simply not sustainable. "Once we get through this adjustment period," says Crane, "I think we'll have room for the market to do OK in the second half."

So why not just take the rest of the summer off? Jump into the Studebaker, head for the coast, travel through Europe with a backpack, relive your youth? Because there's always that chance that what has started to seem like the old familiar pattern might break. Because you don't want to flip on the radio and hear about the rally you missed.

"The market wants to rally," says Sam Ginzburg, senior managing director of equity trading at

Gruntal

. "There are a lot of fake rallies; you do that one, two, three times, they finally go where you want them to go. This is what I see, what I feel. I am in the game, there's money to be made, and I don't want to miss it when it happens, because it's going to be quick."

But Sam, wouldn't you rather be at the beach?