Impressive first-quarter results fail to help inspire Wall Street

NEW YORK (AP) -- With first-quarter earnings roughly 23 percent higher than they were a year ago, you'd think Wall Street would be on fire.
Instead, stocks are struggling amid persistent worries about interest rates. Analysts say the malaise reflects investors' lingering doubts about the future -- and the fact that earnings growth is likely to slow later in the year as companies start hiring and spending again.
"We see another 5 [percent] to 6 percent upside to stocks for the rest of the year," said Jeff Kleintop, PNC Advisor's chief investment strategist. He predicts the Standard & amp; Poor's 500 index will end the year up 8 percent, around 1,200 -- a decent gain, but far from spectacular.
"The point is that profit margins are peaking ... and stocks are probably fairly valued," said Kleintop, who sees the market's behavior as part of a longer-term trend. "I think we're at the beginning of an era of more modest investment returns."
That said, he and other analysts believe the first-quarter results are more than encouraging.
"These are very good earnings," said Howard Silverblatt, market equity analyst for Standard & amp; Poor's Inc. "We're seeing that sales have increased again and that the growth is across the market, not just concentrated in one sector."
Analysts say the overall momentum is encouraging, but the quarter-to-quarter comparisons will get tougher as 2004 advances and companies find themselves up against numbers from late 2003, when profits started to improve.