The action on Wall Street may not have been very exciting lately, with trading remaining in a narrow range, but, in the light of recent bad news from major oil-producing nations, this relative stability is good news for investors. When the market takes bad news in its stride, many investment experts regard it as a clear indication of a bull market. That - combined with some other indicators - has put a positive tone to the market which traders hope will continue for a while.

HereÂ’s what bullish investment pros have said in recent weeks:

• An attempted attack on a Saudi oil processing plant failed to disrupt the flow of production and - though oil prices rose - the market took the news in its stride. The Saudi bombing news came on the heels of reports of attacks and unrest in Nigeria, the worldÂ’s eighth largest oil exporter. The energy sector was last yearÂ’s biggest sector winner, and - although the market certainly remains vulnerable to oil production and price fluctuations - its measured response to troubling news from two of the worldÂ’s biggest oil exporting nations suggests investor optimism is very strong.

• The financial markets seem to have accepted the fact that the Fed plans further rate hikes. Despite comments in February from new Fed Chairman Bernanke suggesting one or, possibly, two hikes, stocks still gained.

• Investors also took in stride a sharp drop in factory orders in January (durable goods fell 10.2 percent, the biggest decline in five and a half years).

• In mid-February, Standard & PoorÂ’s 500 stock index (the S&P 500) hit a major milestone when the forward earnings consensus for the index exceeded $800 billion for the first time. This figure is some 44 percent higher than it was when the S&P hit its previous high (consensus earnings at $556 billion) in March 2000. The bulls suggest that with stock prices 17 percent lower than they were back in the spring of 2000, stocks represent a first class bargain for investors.

• Although we are seeing a "push-pull" of optimism and concern regarding market performance, there is overall confidence in the economy and a strong bullish sentiment.

• Earnings continue to increase faster than stock prices, suggesting that valuations should increase some time in the not-to-distant future.

Caution Lingers
The more cautious and bearish Wall Street gurus point out that trading volume currently is quiet, and that sentiments could change very quickly, with a corresponding sharp decline in market performance. They also suggest that stock prices could remain at todayÂ’s valuations for a while. They note that the market might look good on a technical basis but that this could easily be countered by concerns about higher inflation. The bears also foresee slower earnings growth fueling investor worries, pressuring stock prices and creating choppier market performance.

WhatÂ’s ahead in the second quarter of 2006 remains to be seen. If investor optimism continues to shelter stocks from tough news, Wall Street may continue to enjoy a bull market.