WALL STREET Stocks show signs of gaining momentum

The market needs more good economic news to keep going, analysts say.
NEW YORK (AP) -- Wall Street accepted a variety of disappointments rather well this past week, with stocks posting only moderate declines in response to sluggish retail sales and a drop in revenue at Cisco Systems.
A few months ago, the market would have fallen much harder on any one negative development, and the fact that it didn't in the wake of several has many observers wondering if a bullish trend called momentum investing has returned.
"We're in an environment now which is typical of momentum investing, in which good news is good news and bad news is good news," said Arthur Hogan, chief market analyst at Jefferies & amp; Co.
Even the possibility of deflation, when prices drop too low as demand for goods and services dries up, couldn't keep the market down. The Federal Reserve warned that the economy could be headed into deflation, which can lead to more unemployment and a further slackening demand for products.
But stocks rallied three out of five days this past week, and the Nasdaq composite and Standard & amp; Poor's 500 indexes achieved their fourth straight weekly advance. That kind of resilience is why market observers are talking about momentum investing.
Seizing the lows
The term momentum investing is used to describe periods of vigorous buying on Wall Street, times when investors are more worried about not being in the market sufficiently than about losing money.
"Folks don't want to miss the bottom here," Hogan said.
Analysts are encouraged by signs of real strength behind the market's recent rallies. They say there are indicators of investors' growing confidence in the market.
For starters, the Dow Jones industrial average this past week was able to stay well above the 8,500 level. The Dow finished the week at the 8,600 level.
Trading volume has mostly been on the heavy side for the past two weeks. And analysts are heartened to see smaller retail investors buying stocks along with their larger institutional counterparts.
The riskier bets, namely stocks of smaller companies or technology concerns, have enjoyed the biggest gains, a strong indication that investors are feeling better about the market.
Showing gains
Since March 11, when the market's major indexes were at their lowest levels since hitting multi-year lows in October, the tech-laden Nasdaq has climbed nearly 20 percent. The Russell 2000 index, the barometer of smaller company stocks, has risen 19.2 percent. Both indexes, along with the S & amp;P, ended this past week with their fourth consecutive weekly wins.
Meanwhile, the Dow, home of 30 blue chips, has advanced 14.4 percent and ended this past week with its second straight weekly gain. The S & amp;P, the primary gauge of the broader market, has risen 16.6 percent since March 11.
"People are more risk-ready," said Alan Ackerman, executive vice president of Fahnestock & amp; Co. "What I am seeing here is the public's desire to find something they can get a ride with."
What's needed
Still, the upbeat mood on Wall Street, brought on largely by better-than-expected first-quarter earnings, can't go on indefinitely, not without help. To keep the momentum, the market needs further infusions of good news and a reprieve from the bad, analysts say.
"You have some limiting factors that tend to come into the market after some very good rallies," said Joseph V. Battipaglia, chief investment officer at Ryan Beck & amp; Co.
Battipaglia said that for the market to stay in a momentum-investing groove, investors must see a pickup in job growth, more robust spending by consumers and companies and further quarters of surprisingly strong profits.
Until then, he said, "there really is an ongoing battle between the conducive elements and the negative elements" in the market.