Wall Street paused for breath yesterday as investors waited to see whether the current bout of weakness is simply a correction or whether the market has further to fall. And after the volatile trading on Wednesday which saw the Dow oscillate 180 points in the final half-hour, yesterday's trading was within a narrow band of about 30 points either side of the overnight level. At the close, the Dow was up 30.9 on 8577.68. Analysts said a bunker mentality pervaded the market, with investors splitting into camps of whether this bout of weakness is a correction or whether it is a forerunner of more losses. "Only a few brave souls are buying," commented one analyst.

Apart from Frankfurt, which fell another 2 per cent, European markets were relatively calm and in London the FTSE came from early losses of 85 points to close 38 points lower on 5594.

The Bank of England's monetary policy committee's decision to leave interest rates unchanged gave some support to the market, but dealers also pointed to retail sales at their lowest level for three years as a sign that the troubles of the British manufacturing sector may be spreading to service industries.

In Dublin, the ISEQ closed down 10 points on 5,000, and some in the market believe that, given the quality of Irish corporate earnings, that this should be the floor for the Irish market. That will depend almost totally on how international markets, and particularly New York, behave today.