NEW YORK (AP) _ Like the bubbling lava burps and smoke plumes of a sleepy volcano, the dormant corporate takeover business is showing signs of pre-eruption life.

The biggest belch came from financier Carl Icahn, who dumped his 17.3 percent stake of Texaco Inc. this past week for $2.07 billion cash in one behemoth trade.

It took three big Wall Street brokerages to handle the record block of 42.32 million shares sold for $49 each. The deal riveted attention on Icahn and raised speculation he would use the money to buy, or threaten to buy, another big company.

A flurry of speculative buying in USX Corp. stock suggested that piggybacking investors reckoned Icahn would chase the oil-steel giant, one of his old targets. He remains a significant stockholder in USX.

The Icahn news was all the more dramatic because it came against the background of a slump in the mergers & acquisitions business this year after a frenzy in 1988.

Securities Data Co., a research concern that follows takeover activity, says the value of deals tumbled to $74.36 billion in the first quarter of this year from $137.17 billion a year earlier.

Icahn, of course, declined to disclose his takeover agenda. But the cunning investor has become known for bold and unpredictable moves that sometimes have stupefied followers and critics alike.

More than three years ago he outfoxed Texas Air Corp. Chairman Frank Lorenzo to acquire Trans World Airlines. Later he stunned the airline business by making a last-minute though unsuccessful run at USAir Group Inc.

Contrary to widespread expectations, Icahn not only has kept TWA but evidently turned it into a moneymaker. He even has ordered a fleet's worth of new Airbus jetliners, contradicting some union claims that he wouldn't invest money in TWA, which has some of the industry's oldest jetliners.

At the same time, however, Icahn has been using TWA's assets to raise money for other adventurous investments - including his much publicized stake in Texaco as it struggled out of bankruptcy a year ago.

Icahn plans to raise an additional $300 million soon by selling TWA bonds backed by collateral that ranges from airport-landing slots to spare light bulbs. The Wall Street Journal calls the offering ''light bulb bonds.''

If Icahn combined that money with the cash raised from the Texaco stock sale, he could borrow several times that amount to launch a takeover of a company worth at least $10 billion.

Icahn's maneuvering wasn't the only rumble that stock speculators heard this past week. Unionists at two other airlines, Eastern and Northwest, were maneuvering to align themselves with financiers who expressed buying interest in those companies. Also, a Canadian company chasing Dunkin' Donuts upped its stake in the chain.

And in what some would call the morbid side of takeover speculation, toy giant Hasbro Inc.'s stock shot up on word that chairman Stephen Hassenfeld was hospitalized in intensive care with pneumonia. Such speculation often accompanies serious illness or deaths of top executives.

In other business news this past week:

-Government statistics suggested the economy has slowed, easing pressure on the Federal Reserve to keep interest rates up and rallying the stock and bond markets. Though unemployment fell in April, new-job growth hit a three-year low. Other figures showed construction spending barely rose in April and productivity shrank in the first quarter.

-Retailers reported depressed sales for April, suggesting consumers are cutting back to save money and pay debts. The figures also suggested Sears Roebuck & Co., the No. 1 retailer, suffered from declining shopper interest in its revamped low-price strategy aimed at competing with fast-growing rivals. -Next-century innovations were announced for two staples of many American homes, the television and the Bible. Nielsen Media Research said it was developing a ''passive people meter'' that would actually watch viewers to determine which ones were watching what shows and when they left the room. Franklin Computer, a Mt. Holly, N.J. company, unveiled an electronic version of the Scriptures delivered by a new hand-held computer.

End Adv for Weekend Editions June 3-4