Was last week's stock market dip the start of a broader 'correction'?

For months now, some of the leading market seers have been predicting a stock market ''correction.'' After last week, when the Dow Jones industrial average fell 13.84 points, closing at 1,218.75, market observers began to wonder if the widely forecasted pullback had finally arrived.

Larry Wachtel, vice-president for research at Prudential-Bache Securities, commented: ''If you took it in a vacuum, it's not much of a pullback. But given the fact the market is up for nine months now, when the market pauses everyone gets scared and asks, 'Can this be it?' ''

Wall Street analysts seem to be pretty much divided on whether the pullback has actually begun. Two weeks ago John Mendelson, a technical analyst at Morgan Stanley & Co., said he thought that a 10 to 15 percent correction, lasting through the summer, had begun and that the market levels reached this month would be the year's highs.

And, in a double-barreled shot at the market, Barton M. Biggs, Morgan Stanley's director of research, said he was inclined to be ''more cautious about fresh buying.'' Mr. Biggs cited Business Week's cover story on ''The Rebirth of Equities'' as an example of the press's sighting a trend once it is about over. Furthermore, he said, ''The stock market has surged ahead of the bond market, and my guess is that bonds will do better than stocks for the next several months.''

Salomon Brothers, however, in its equally influential Portfolio Managers' Weekly Research Summary, said it viewed skepticism about the market as healthy. ''Bull markets advance further when skeptics become believers,'' the newsletter said. There is enough cash around to fuel a further advance, it noted. And, countering Mr. Biggs's perception that the stock market had gotten ahead of the bond market, Salomon believes the opposite is true: The bond market is ahead of the stock market.

If the correction is starting, says Hugh Johnson, senior vice-president at First Albany Corporation, an investment banking firm based in Albany, N.Y., ''I wish it would happen, just to get everyone to stop talking about it.'' Even if the correction does occur, he says, it could be selective, since many institutions have developed a list of ''core holdings,'' that is, stocks they want to continue to hold even if the market dips. He believes these holdings are less likely to fall as much as the stocks ''they care less about.''

Mr. Wachtel says he does not consider this the start of the big correction - but rather only a 5 percent pullback. He says that keeping the market fueled is a huge cache of money that flowed into the mutual funds last month. When the new sales of mutual funds are reported this week, he says, ''it will be humongous. Any downside action in the market will be arrested by this cash flow.'' For the long-term investor, Mr. Wachtel advises, ''Hang in there and accept the profit taking, because you probably aren't smart enough or nimble enough to get back in.''

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