GO, GO, GO!; STOCK MARKETS' RECORD DAY: DOW GAIN: 337.17; VOLUME: 1.2 BILLION; NASDAQ GAIN: 67.93; VOLUME: 1.4 BILLION; DOW SURGES TO RECORD 1-DAY GAIN.

Byline: Leslie Eaton The New York Times

Main Street rode in Tuesday to rescue Wall Street - and stock markets around the world - as America's amateur investors rushed to buy stocks, halting the global financial free fall that began last week.

The result smashed every record around.

Shares of America's biggest and strongest companies rallied sharply. The Dow Jones industrial average soared 4.7 percent, the greatest gain in more than a decade and the sixth-largest ever.

As soon as the closing bells started ringing through the cavernous New York Stock Exchange, traders erupted into cheers and threw trading tickets into the air. It was the second celebration in an hour on the floor. Earlier, traders chanted ``Go, Go, Go'' as volume neared 1 billion shares and broke into cheers once the milestone was reached. At 4 p.m., volume on the NYSE was 1.195 billion shares, beating the 685.5 million-share record set Monday.

While the stock exchange said it handled the flood with little difficulty, some brokerage firms that cater to individual investors reported jammed phone lines, and some of their electronic trading systems slowed to a snail's pace.

And the Nasdaq Stock Market, essentially a network of dealers who trade many small companies and high-tech issues, encountered trouble late in the day, after it, too, had seen a billion shares change hands. After 3:17 in the afternoon, traders' computers could not tell them the last price a stock traded at, though they did report bids from other dealers.

The record 337.17 point rise in the Dow did not eradicate all the losses suffered Monday, when the Dow plunged a record 554.25 points. But the rebound in the United States helped spark rallies around the world, beginning with Mexico and spreading.

Stocks surged 8 percent in Australia early today and were up sharply in Taipei. Much of the buying in the United States was done in small trades that are the hallmark of individual investors, although some were clearly done by professionals who were buying small quantities of many stocks.

By contrast, institutional-size orders - blocks of more than 10,000 shares of any stock - appear to have been largely sales, said Laszlo Birinyi of Birinyi Associates, a research firm that monitors Big Board trading patterns.

Wall Street had been crossing its collective fingers in the hope that small investors would consider the decline a ``buying opportunity,'' as they have in every market decline since 1987.

The amateurs did not disappoint. At Charles Schwab & Co., individual investors placed an extraordinary number of orders before the market opened - and buys outnumbered sales three to one.

Among investors saving for retirement, ``We saw buying at levels we have not seen before'' in such circumstances, said David Castellani, senior vice president of Cigna Retirement and Investment Services. The company manages the third largest 401(k) retirement program in the country, with 1.3 million investors and $22 billion in assets.

It was the professionals, Castellani said, who got frightened and ``pulled the covers up over their heads,'' selling stocks in favor of cash.

Many market professionals remain cautious, and fear that Tuesday's recovery cannot be sustained. ``Is this the classic rebound that means everything's just fine? I don't think we're there yet,'' said Jeffrey Applegate, chief U.S. strategist for Lehman Brothers.

There were some worrisome signs. While all sectors of the market rose, few kept pace with the 30 stocks in the Dow average, signaling that investors were sufficiently nervous to focus on blue-chip stocks.

While the Standard & Poor's 500 index climbed 4.6 percent, the Nasdaq composite index, which includes smaller issues as well as big technology and financial companies, rose 4.3 percent. And the Russell 2000 index of small stocks gained 2 percent.

The number of stocks that rose surpassed the number that fell, but not by much. On the Big Board, 1,809 stocks climbed, while 1,306 fell; usually, during a strong rebound, winners far outnumber losers.

And while 12 stocks did hit new highs, 317 fell to new lows.

``Historically, the first recovery try almost always looks like a failure a couple of days later,'' warned Christine Callies, U.S. investment strategist for Credit Suisse First Boston. But, she said, she expects that stocks will have fully recovered by early next year, adding, ``the chain reaction has probably been broken.''

That did not look likely early Tuesday morning.

Asian markets, where the carnage had begun, slid still further. In Hong Kong, the Hang Seng index plunged 13.7 percent Tuesday, putting it down by almost a fifth in just two days. Markets in Malaysia, Thailand, Indonesia and the Philippines all fell more than 6 percent, and even Japan's already-depressed market fell 4.3 percent.

In the United States, futures on stock prices, which trade overnight, immediately fell as far as market rules permit, and plunged even more Tuesday morning.

Traders braced for a bad day, and at first their fears seemed justified. When the Big Board opened at 9:30, trading could not begin in more than 150 stocks, including big names like Xerox, Ford, IBM, Merck and Bell Atlantic.

The problem facing the specialists, whose duty is to find a price that matches buyers and sellers (and buy or sell shares themselves if necessary to get the market open), was that investment psychology was shifting dramatically as they tried to open stocks.

Citicorp, to take one example, had closed the day before at $122.31 per share. The specialist first said he expected it to open Tuesday in the range of $109 to $114 per share. Then, with buy orders coming in, that range was raised to $121 to $125, only to retreat again. It finally opened at 10:17 a.m. at $113, then rose during the day to close at $127.50.

It was just as Citicorp started trading that the market, which had fallen almost 200 points in less than an hour, suddenly reversed course, for a number of reasons.

For one thing, much of the early selling was from orders left over from the previous day, when the market's precipitous fall triggered - twice - the trading halts known as circuit breakers, which had never been tripped before. Orders not executed before the final shutdown at 3:30 Monday hit the market first thing Tuesday.

Once all that selling ended, things changed. One reason may have been that the most influential guru on Wall Street, Abby Joseph Cohen of Goldman, Sachs & Co., had issued a long and reassuring statement to her firm's clients, which included a section called ``Bad analogies: 1997 is not 1987.'' Indeed, she even urged them to buy stocks, raising the equity portion of her recommended portfolio to 65 percent, from 60 percent.

Corporations may have done their share, too. At 10:36, computer screens flashed with the news that IBM was willing to spend as much as $3.5 billion to buy shares of its own stock, shares that had begun the day at $89, more than $20 less than the high they hit back in August. The company's stock ended the day at $99.38, up almost 12 percent.

At the New York Stock Exchange, Richard Grasso, chairman of the Big Board, credited the circuit breakers with giving amateur investors enough time to decide what to do. ``We seek to put the 100 share consumer and the 1 million share consumer on a level playing field,'' he said.

Some amateur investors were jubilant late Tuesday because they had bet against the market professionals - and won.

``Average American investors work in this country, they believe in it and they invest in it,'' said Brent Budowsky, an investor in Washington, D.C., who said he did not sell a share of his family's holdings on Monday. Investors like himself, he added, ``are the backbone in America and they stood up for it.''

BACK IN THE MONEY

After seeing the value of their principal holdings shrink by nearly $4 billion in Monday's stock market sell-off, the five richest Americans saw their fortunes from those stocks rebound by about $3.6 billion with Wall Street's turnaround Tuesday.

Following is a list of those five and other famous billionaires, their principal holdings, and Tuesday's rise in value for that holding. In parentheses is Monday's drop in value:

Bill Gates, chairman and chief executive of Microsoft Corp., $1.25 billion ($1.76 billion)

Warren Buffett, chairman and CEO of Berkshire Hathaway Inc., $765.2 million ($717.3 million)

Paul Allen, co-founder of Microsoft Corp., $426.9 million ($600 million)

Larry Ellison, chairman, CEO and president of Oracle Corp., $681.1 million ($610.2 million)

Gordon Moore, chairman of Intel Corp., $461.1 million ($236.2 million)

Walton family, Wal-Mart Inc., $2.08 billion ($1.64 billion)

Ted Turner, vice chairman of Time Warner Inc., $115.6 million ($185 million)

Michael Dell, chairman and CEO of Dell Computer Corp., $242 million ($321 million)

Phil Knight, chairman and CEO of Nike Inc., $131.5 million ($269 million)

(Because of incorrect figures provided by the Nasdaq Stock Market, The Associated Press erroneously reported Monday how much Larry Ellison, chairman, chief executive and president of Oracle Corp., and Michael Dell, chairman and chief executive of Dell Computer Corp., lost on their principal stock holdings Monday.

The drop in Ellison's holdings of Oracle Corp. was $610.2 million, not $666.9 million. The drop in Dell's holding of Dell Computer Corp. was $321 million, not $324.4 million.)

Source: Most recent proxy statements filed with the Securities and Exchange Commission.

BIGGEST POINT GAINS

The Dow Jones industrial average recorded its biggest daily point gain in history Tuesday, adding 337.17 points. Here are the 15 best point days for the average, including percentage change in value:

Oct. 28, 1997: 337.17 to 7,498.32, 4.7 percent.

Sept. 2, 1997: 257.36 to 7,879.78, 3.4 percent.

Oct. 21, 1987: 186.84 to 2,027.85, 10.1 percent.

April 29, 1997: 179.01 to 6,962.03, 2.6 percent.

Sept. 16, 1997: 174.78 to 7,895.92, 2.3 percent.

April 22, 1997: 173.38 to 6,833.59, 2.6 percent.

July 22, 1997: 154.93 to 8,061.65, 2.0 percent.

June 24, 1997: 153.80 to 7,758.06, 2.0 percent.

May 5, 1997: 143.29 to 7,214.49, 2.0 percent.

Oct. 21, 1997: 139.00 to 8,060.44, 1.8 percent.

SHARE-TRADING MILESTONES

Following are the busiest days on the New York Stock Exchange:

Date Shares Traded

Oct. 28, 1997 1,196,018,713

Jan. 23, 1997 684,588,000

Oct. 27, 1997 684,571,000

July 16, 1996 680,913,000

Oct. 24, 1997 677,241,000

Oct. 23, 1997 672,506,000

Dec. 20, 1996 654,110,000

June 20, 1997 652,945,000

July 16, 1997 652,848,000

Dec. 15, 1995 652,829,000

CAPTION(S):

3 boxes, chart

BOX: (1) Back in the money (see text)

(2) Biggest point gains

(3) Share-trading milestones

Chart: Dow, Nasdaq (timeline)