DOW'S DIP DROPS '97 GAINS TO 1%.

Byline: Bruce Meyerson Associated Press 

The Dow Jones industrial average took its third big spill in four sessions Wednesday, wiping out almost all that remained to this year's robust gains.

The Dow fell 94.04 to 6,517.01, trimming 1997's once-healthy gains to just 1 percent. Less than a month ago, when it set a record high of 7,085.16, the famed blue-chip barometer was sporting a 10 percent gain for 1997.

Broad market measures also pulled back sharply in Wednesday's volatile session, which saw the Nasdaq market sink to its lowest level since September.

Notably, in less than a week, the buzz among market analysts has shifted from whether or not the market has entered a ``correction'' - a term used to describe a pullback of at least 10 percent - to how steep the correction will be.

``Intellectually, most people felt a correction would be a good thing for the market,'' said Russ Labrasca, senior vice president at Principal Financial Securities of Dallas. ``But now that we're in the midst of one, no one is pleased with the pain that goes along with that correction.''

With Friday's employment report looming over the jittery market, many money managers were reluctant to bargain hunt. The shortage of buyers and the relatively low trading volume left the market vulnerable to computer-driven sell programs that kicked in repeatedly during the session.

``When the market does come back, the buyers are reluctant,'' said Labrasca.

Stocks were pressured again by the bond market, where long-term interest rates flirted with another six-month high, undermining a potential follow-through to Tuesday's modest rebound.

As bond prices fell, the yield on the 30-year Treasury bond - a key determinant of company and consumer borrowing costs - edged as high as 7.10 percent, threatening to break Monday's six-month high of 7.09 percent. Stocks started to rebound in afternoon as the long-bond yield settled back near late Tuesday's 7.07 percent.

Bond traders were mildly encouraged Wednesday morning after the Commerce Department reported that orders to U.S. factories rose a moderate 0.8 percent in February.

The increase was slightly below many forecasts, but coming on the heels of a robust 2.5 percent gain in January, the latest factory orders tally represented a record high and reinforced other recent reports portraying vigorous - and potentially inflationary - economic activity.Those reports have aggravated concerns the Federal Reserve, which last week raised one of its key lending rates to help keep a lid on inflation, will see a need to keep hiking interest rates.