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To: Thean who wrote (1534)	8/4/1998 9:01:00 PM
From: Broken_Clock	Respond to of 14427

Tuesday August 4, 8:07 pm Eastern Time INSIGHT - Dow still has room to shed more blood By Huw Jones NEW YORK, Aug 4 (Reuters) - The Dow's slide may not be over if blue chips are to fall properly in line with the pullback already evident in the broader market, analysts said on Tuesday. About two-thirds of the shares traded on the New York Stock Exchange are now below their 200-day moving average. ''This means that most stocks are going nowhere,'' said Frank Gretz, technical analyst at Shields & Co. Based on Monday's close at 8,786, the Dow Jones industrial average's 200-day moving average was 8,468.41. In late afternoon on Tuesday, the Dow was off 124 points at 8,663, after hitting a session low of 8,562, its weakest since mid-March. The Dow's low for the day was 8 percent off its record high close of 9,337.97 on July 17, just shy of a 10 percent market correction. The blue chip index was still up 9 percent on the year. Bonds look set to gobble up the cash deserting stocks as worries mount over less rosy prospects for second-half corporate earnings, analysts said. The benchmark 30-year Treasury bond was up 8/32, and its yield, which moves in the opposite direction, fell to 5.64 percent from 5.67 percent on Monday. Expensive big-cap stocks could no longer defy gravity, analysts said. ''Eventually the average stock tends to drag down the big stocks, and that is what we have seen for the last week or so,'' Gretz said. ''Big stocks are having a catch-up move on the downside.'' The average stock is already in a bear market after three weeks of almost broad market declines on the New York Stock Exchange despite the Dow, the S&P 500 index and the Nasdaq Composite index all making new highs, Gretz said. Those record gains in leading indices were founded on strength in just a small number of big caps, analysts said. ''I don't think there is any major identifiable support levels in the popular averages,'' said Eugene Peroni, chief technical analyst at Janney Montgomery Scott. ''The average stock continues to fall, and I see the Dow and the S&P 500 following in their footsteps,'' he said. ''This could be a lengthy period in terms of a decline.'' Peroni said stocks rose so much because of the ''flight-to-presumed-quality'' as the Asian financial crisis unfolded. ''There is now a growing perception that earnings are going to be weak, and so the money is going to come out of equities and go to the next safe haven -- bonds,'' Peroni added. The Dow could be on course for a 15-20 percent pullback from recent record highs, according to Prudential Securities director of technical research Ralph Acampora. He said he would no longer characterize the market's downturn as a ''stealth decline,'' with stocks falling across the board but blue chips falling less. ''The implications are the Dow will eventually go lower and take out its June 1998 low,'' Acampora said. ''If we close below that, then ... the Dow could drop 15-20 percent from its 1998 closing high.'' Gretz pegged support for the Dow between 8,500 and 8,600. Peter Green, technical strategist at Gruntal & Co., said the market's slide could be halted if the Dow Jones transporation average and the Nasdaq Composite index turned around. The transport average is already down for the year, along with the Russell 2000, a measure of small stocks.