In the Multitrack view Enable Global Clip Stretching (the clock icon at the top of the track headers between the Metronome and Snapping enable icons. Then you can select either Realtime or Rendered mode in the Clip/Stretch menu or right clik on the clip and go to Stretch on the drop down menu. Then using the Time tool you can stretch or compress the clip as you want. Using the Real time mode you can hear the stretch alter as you play but having decided how much Stretch you want select the Rendered mode for the best quality final result.
Is there a way to do this in waveform view? And can I manipulate the waveform vertically as well as horizontally?
No. There's a considerable difference between multitrack and waveform view - they have different functions completely. Multitrack view is essentially a very posh player system, and it's non-destructive. This means that if you want to alter the playback of a clip, it almost doesn't matter how you represent it in that view - the player will respond appropriately, because it's not the actual waveform as such that has been manipulated, just the playback of it. And it's how all these different clip playbacks work together that give you your final mix.
Waveform view is different though. This is a destructive editor, and what you see on the screen is an accurate representation of the actual waveform you've got. So yes, you can apply effects like time-stretching, etc to it but only as process effects - so the waveform won't change until you apply the effect. If you save the file at that point, the result is permanent - which it never is with Multitrack view.
A vertical manipulation of the waveform simply makes it louder or quieter. What exactly are you trying to achieve here?