Stocks Stabilize; Bonds Continue Their Comeback : Markets: Up-and-down day reflects search for safer returns and bargain issues. Dow is off 4.4% in past five sessions.

Stock prices steadied Wednesday after their drubbing the previous day but still ended with their fifth straight loss amid the heaviest trading in eight months, as investors continued to shift money from stocks to bonds.

Bond prices rallied again, sending the yield on 30-year Treasury bonds below 8%. The dollar was mixed against other major currencies.

The Dow Jones average of 30 industrials slipped 3.36 points to 3,674.63. But that was a victory of sorts because the blue-chip indicator had opened sharply lower after plunging 91.52 points on Tuesday.

Nonetheless, the Dow over the past five sessions has lost 170.57 points, or 4.4%. Since reaching its record high of 3,978.36 on Jan. 31, the average has plummeted 303.73 points, or 7.6%.

Broader market measures also eased Wednesday, and losers overall finished slightly ahead of gainers on the New York Stock Exchange.

The up-and-down session reflected continued selling by investors seeking safer returns in bonds and other fixed-income investments, and buying by investors looking for stocks they now consider too cheap to avoid in light of the market’s recent slide, analysts said.

“It’s been a fairly good zinger” in terms of the stock market’s drop, and that has “attracted some bargain hunting,” said Eric Miller, chief investment strategist at Donaldson Lufkin & Jenrette in New York.

Analysts said the market also drew some support from money managers who were buying shares to adjust their portfolios, and from short-sellers who were covering their positions ahead of the Thanksgiving weekend.

The result was Big Board volume of 430.7 million shares, up from 383.3 million Tuesday and the heaviest turnover since 461.9 million shares changed hands March 18.

Financial markets are closed today in observance of Thanksgiving Day, and trading is expected to be light Friday as many traders opt for a four-day weekend.

Several big mutual funds, meanwhile, said the market’s recent plunge has prompted some individuals to move their cash out of stock funds and into bond and money market funds, but they said the exodus was by no means a stampede.

“On balance, it seems to be people switching from equity funds, mainly international and aggressive funds, to money market funds,” said Steven Norwitz, a spokesman for T. Rowe Price Associates, which manages $37.3 billion spread among 60 funds.

Wall Streeters have been watching the funds closely because the $860 billion in equity funds is a major pillar of support for the market. There’s concern that if the market continues to suffer sharp declines, many individuals might redeem their shares in favor of other investments--knocking stocks even lower.

But so far, “we haven’t seen any discernible trend out of equities,” said John Woerth, a spokesman for the $130-billion Vanguard Group family of funds. “For the most part, our equity fund shareholders are staying the course.”

Nonetheless, it was evident that many investors aggressively bought bonds Wednesday. The price of the Treasury’s benchmark 30-year bond rose nearly 3/4 point, or $7.50 for every $1,000 in face value, and its yield fell to 7.94% from 8.01% on Tuesday.

Bonds and other fixed-income securities have caught investors’ ardor lately because of the recent rise in interest rates engineered by the Federal Reserve Board, which in turn has boosted the securities’ yields.

Traders are also worried that the rate increases will crimp corporate earnings and slow the economy’s growth. On Wednesday, they continued to sell many transportation issues and other so-called cyclical stocks that are seen as particularly vulnerable to an economic slowdown.

The airlines were hit hard. UAL, United’s parent, lost 2 1/2 to 91 1/4; Delta Air Lines fell 2 3/4 to 48 5/8; AMR, parent of American, was off 1 5/8 to 50, and Federal Express slumped 2 3/8 to 57 3/4.

But another economically sensitive sector, the auto industry, posted gains. General Motors rose 1 1/8 to 37 3/4, Ford Motor climbed 3/8 to 27 1/4 and Chrysler was up 1 3/8 to 47 7/8.

Among other market highlights:

* H&R; Block recovered 2 to 35 1/2 after plunging 6 7/8 on Tuesday amid investor concern that a recent Internal Revenue Service decision could hurt part of Block’s tax-preparation business.

* Pfizer fell 2 3/8 to 72 1/2 after announcing plans to buy SmithKline Beecham’s animal health business for $1.45 billion in cash.

The NYSE composite index fell 0.14 to 246.18 points, while the Standard & Poor’s 500-stock index fell 0.16 points to 449.93. The Nasdaq composite index dropped 4.51 points to 736.70.

In foreign trading, the London FTSE index fell 51.2 points to 3,027.5, and the Frankfurt DAX index of 30 leading stocks dropped 33.24 points to 2,040.04. In Mexico City, the Bolsa index fell 34.39 points to 2,416.67. Tokyo markets were closed for a holiday.

In midafternoon trading, the dollar was quoted at 1.5520 German marks, down from 1.5535 on Tuesday. Against the Japanese yen, the dollar stood at 98.35 yen, up fractionally from 98.30 on Tuesday.

Heating oil futures soared ahead of the holiday weekend, as cold Northeastern weather and the Brazilian oil workers strike combined to drive prices higher.

January crude, helped by a decision by the Organization of Petroleum Exporting Countries to renew its production quota of 24.52 million barrels a day for one year, gained 33 cents to $18.15 a barrel.