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 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 & 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."

Analysts say the overall momentum is encouraging, but 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.

At the same time, companies are expected to start spending again — hiring new employees and buying computers and equipment. Merger and acquisition activity is also expected to pick up as companies grow more confident.

All that spending will likely reduce corporate profits.

Add that dubiousness to the specter of rising interest rates and anxiety over the war in Iraq and terrorism and you have a recipe for cautiousness.

Wall Street suffered through a trying week as interest rate angst prompted investors to shrug off just about every bit of good economic and earnings news.

The Dow Jones industrials lost 247.27, or 2.4 percent, over the week, closing at 10,225.57.