Will the Peace Bring a Bring Prosperity to Match? Wall Street's Confidence Signals Rally May Continue
he stock market was right on the money in predicting a quick victory in the war. The question now is whether Wall Street's confidence in the economy will prove to be equally accurate.</br></br>This year's powerful stock market rally, which took off in mid-January when the first bombs fell on Baghdad, has acquired so much internal momentum that many analysts now predict that stock prices will remain on an overall upward trajectory through the spring and into early summer.</br></br>"Without much problem, over the next two to four months, I think we can get to a level of 3200 on the Dow," said Thomas F. Carpenter, senior vice president and chief economist at ASB Capital Management Inc., Washington's largest investment management firm. That would represent a 10 percent gain in the Dow Jones industrial average, the best-known measure of the market, which closed on Friday at 2909.90.</br></br>But the market's fate in the second half of the year will depend heavily on whether the economy pulls out of its current slump in coming months and paves the way for a significant improvement in corporate profits in 1992, according to Wall Street strategists and portfolio managers. Many experts are worried that a weak banking system, revived inflation and economic downturns abroad may sap the stock market's strength.</br></br>"For me, the rest of the first half is going to be fine {for the stock market}. It's the second half that's going to be the letdown," said Joseph A. Feshbach, executive vice president and director of technical market analysis at the New York investment firm of Lehman Brothers Inc., a subsidiary of American Express Co.