While Wall Street continues to keep a vigil waiting for a clearer indication of a winner in the ongoing battle for Paramount Communications, financial sources said the auction process is still in its early stages.

While Paramount’s board met for more than six grueling hours Tuesday trying to decide which offer it will recommend to shareholders, the board recessed until today without taking action. But sources said even when the board gives its recommendation, it may prove nothing more than a prelude to a rejoined bidding war.

“Even if the board recommends one bid over another, the offers have to stay open for another 10 days, and that’s plenty of time for the low bidder to come back to the table with a higher offer,” noted one large Paramount shareholder. “There’s really no good reason for them to hurry and do that right away.”

QVC announced late Monday night that it had raised the cash portion of its offer by just $ 2 a share, or $ 100 million. Even so, that offer was said to top Viacom’s latest bid (Viacom still has not commented on its offer).

“They’re still feeling each other out,” the source said. “The investment bankers will work them over for the next couple of days, and then we’ll see some increased bids.” For that reason, some are predicting the Paramount auction will still be going on well after the holidays are over.

Sources said both Viacom and QVC have been in negotiations with their respective backers about raising their bids. QVC’s strategic partner BellSouth was said to be more than willing to help in significantly upping QVC’s bid, but Diller convinced the company to follow what appears to be a wait-and-see approach.

The lack of substantially higher bids sent Paramount’s stock tumbling Tuesday; it lost $ 1.63 to close at $ 80.38. QVC dropped $ 1.50 to $ 42. Viacom’s Class A shares slid 63 cents to $ 49.88 while its Class B shares inched down 13 cents to $ 45.13.

While arbs and money managers are eagerly awaiting higher bids, a number of Wall Street analysts have downgraded Paramount’s stock, saying that at 25 times 1993 cash flow, it’s astoundingly overpriced.

Even so, with the personalities involved, most believe there will be at least one more volley before a winner emerges.

“Someone could just get completely fed up and drop out,” one market veteran said. “But with Sumner Redstone and Barry Diller (the respective chairmen of Viacom and QVC) in as deep as they are, we really may be in for a duel to the death.”