The October siege of the stock market eased at least temporarily yesterday as selling pressures slackened and investors went bargain hunting among the battered blue chips, lifting the market higher.

The Dow Jones industrial average of blue chip stocks climbed 52.56 points, or 2.9 percent, to close at 1846.49, although stocks that rose on the New York Stock Exchange outnumbered those that fell by a slim 9-8 margin.

Market averages on the American Stock Exchange and over-the-counter market fell 0.48 percent and 0.85 percent, respectively.

The advance on the New York Stock Exchange came only a day after the Dow plummeted 156.83 points in a torrent of selling by nervous investors. Since Oct. 1, the Dow has declined almost 750 points, or 29 percent.

The Dow rose 84.22 points in the first half-hour of trading yesterday, spurred by orders from overseas, where markets also were rebounding.

When the foreign buying dissipated, Wall Street analysts said, the rally ran out of steam and the Dow began to give up some of its gains. After bouncing around, the Dow was up 26.86 points at 1:30 p.m. then, in a burst of energy, finished up 52.56 points at the 2 p.m. close.

Volume on the New York Stock Exchange totaled 260 million shares. Although heavy by historical standards, that figure pales in comparison with two 600 million-share days last week.

Once again, Wall Street appeared to take its cue from overseas, as stocks opened higher after the Tokyo and Hong Kong markets reported strong performances. The NYSE opened down sharply Monday after the overseas markets fell.

Scott E. Pardee, vice chairman of Yamaichi International (America) in New York, said it appeared that U.S. investors were placing orders to be executed when the New York market opened, based on overnight news reports from Tokyo and other markets overseas.

"Meanwhile," he said, "the Japanese are watching and reacting {on the Tokyo Stock Exchange} to what is happening in the U.S. markets," creating a sort of chicken-and-egg situation.

Pardee said the order flow to Yamaichi's office in New York from Japan, recently composed mostly of sell orders, was now more mixed and leaning toward the buy side.

"It's a mixture of people leaving the battlefield and people coming in and picking up bargains," he said.

In trading early today, stock prices pushed broadly higher on the Toyko Stock Exchange.

Institutional investors said yesterday that they also were hunting for bargains among stocks that have been battered since the Dow's 508-point drop on "Black Monday," Oct. 19.

Mike Ducar, director of investment research for IDS Financial Services Inc. in Minneapolis, said the company's mutual funds have been pouring millions of dollars into stocks they considered cheap. IDS manages $36 billion, including money market funds.

Before the market plunge, Ducar said, IDS portfolio managers had put between 15 percent and 20 percent of their funds into cash.

When stocks fell, they decided to take 25 percent of their cash and use it to buy stocks. The process began during the middle of last week and was continuing, he said.

Ducar said they were buying the stocks of companies that make drugs, cosmetics, soap, foods and other staples that people would need even in a recession. But they were avoiding stocks of companies that make cars, television sets, refrigerators and other items whose purchase could be postponed in unfavorable economic times.

"As a group we feel that the worst is over," said Ducar. He said the view was based on the Federal Reserve's decision to provide easier credit to the nation's banking system, the wave of corporate buybacks of stock that have been announced and the NYSE's decision to discourage the use of computerized program trading.

"We should be back to normal soon," Ducar said.

The NYSE has been closing at 2 p.m. to allow market participants to catch up on the massive amounts of paperwork created by the unusually high volumes of trading.

The course of the market seemed far more uncertain to several market analysts yesterday.

Laszlo Birinyi, a market strategist for Salomon Brothers, said the market was "still in a period of great emotionalism and great concern" and said he expected a "choppy up-and-down pattern" to continue for a while. "Yesterday it was gloom and doom. Today there's been some lift," he said.

After a five-year bull market in which traders were always looking for the top, they are now looking for the bottom, Birinyi noted.

"It's not until everyone stops looking for a bottom that we will get one. And that will be a while," he said.

Charles Comer, a market analyst for Moseley Securities Inc. in New York said, "I think it is over," as he reflected on the wild market swings that began last week.

"It will take months of building a new base for the market," he said, and noted that there would be "many a false start" as the market moves into a calmer trading range.

Comer said lower stock prices would bring many investors back into the market.

"The excesses {in the price of the stocks} have been pretty well wrung out," he said.

At the other end of the spectrum of market philosophy was Michael C. Aronstein, president of Comstock Partners Inc. of New York, a prominent money management firm.

Aronstein said he believes the market's swift decline is part of a broader economic pattern, reflected in the hard times that have fallen on the agricultural and energy sectors and that now are falling on the financial services sector.

"We haven't yet begun to see the fallout" in the financial services industry, he said, suggesting that a "depression" is likely to ensue in this sector, although it may take a long time to be fully felt.

He said he expects the market to decline even more, although the drop in prices has cured much of the overvaluation of stocks. "At 1300 to 1500 {on the Dow}, stocks will begin to look very cheap," he said.

Robert Kirby, chairman of Capital Guardian Trust Co., said, "I have a feeling that most people are kind of in a watch-and-wait sort of mood. Our approach has been to do some buying.

"On balance, I don't think we have tried to sell anything since the crash began, but we have found that executing buy orders is really chancy. You just have no idea what kind of executions you are going to get.

"You see stocks print at a price and then you can't buy them there," he said. "I suspect with the shortened trading day, this will {return} to normal."

Meanwhile, the stock market collapse, which economists have said may induce consumers to buy less, has had only a slight impact on consumer confidence so far, according to a weekend poll.

The Conference Board, which has been monitoring consumer confidence for 20 years, found during a special weekend telephone survey that confidence had slipped by only about 5 percent, from an index level of 116.9 before the collapse to 110.4.

Only 15 percent of those surveyed said they were "extremely concerned" about stock prices; another 60 percent were "somewhat concerned" and 25 percent -- presumably those with no stocks or those who still have a great deal of money -- were "not at all" worried.

The survey respondents also expressed surprising optimism about the future of the market.

More than 25 percent said they expected stock prices to increase substantially, while only 15 percent said stock prices will continue to decline. The remainder predicted stock prices will remain at about their present levels.

Only in the area of translating the stock market's losses into their own spending plans did consumers turn gloomy in larger numbers -- although still fewer than half. About 27 percent said they will postpone or reduce their purchases as a result of the decline, while 73 percent said the drop will have no effect on their plans.

In the market yesterday, the New York Stock Exchange Index added 2.63 to 130.51. Standard & Poor's 500-stock index climbed 5.52 to 233.19.

However, the American Stock Exchange Market Value Index fell 1.15 to 238.52. Losers led gainers 471-309.

The National Association of Securities Dealers index of over-the-counter stocks slipped 2.56 to 296.34.

The rally in the bond market cooled as prices on 30-year Treasury bonds fell $17.50 for every $1,000 of face value. Yields, which move in the opposite direction, rose to 9.06 percent from 8.90 percent.

The dollar was weaker in trading against both the West German mark and the yen.

American Medical International was the most active NYSE-listed issue, unchanged at 11 1/2. American Telephone & Telegraph followed, rising 1 1/4 to 27 1/2.

Allegis was third, climbing 9 1/2 to 71. It agreed to sell its Westin Hotel subsidiary to a group of Japanese and U.S. investors for $1.53 billion.

IBM climbed 6 to 118 and said it will buy back up to $1 billion of its common stock as part of its continuing stock repurchase program.

Among other blue chips, General Electric rose 1 1/8 to 43 3/4, American Express climbed 1 3/4 to 23 3/4, Dow Chemical jumped 4 5/8 to 64 3/8, USX rose 1/4 to 25 1/4, Eastman Kodak rose 3/4 to 50 3/4, Coca-Cola climbed 1 1/4 to 37 1/2 and Philip Morris rose 3/4 to 85 3/4.

General Motors picked up 3 7/8 to finish at 59 3/8. The nation's largest auto maker said third-quarter earnings rose to $2.28 a share from 80 cents in the year-ago quarter.

Chrysler was unchanged at 24 1/2. Chrysler will lay off 3,500 salaried employes by year-end. The company also reported third-quarter earnings of $1.15 a share, up from $1.06 in the year-ago period.

CBS jumped 8 1/2 to 153 7/8. The company said that it is holding talks with Sony on the sale of its CBS records unit for $2 billion.

Washington Post Staff Writer David Vise and Anne Swardson contributed to this report