Another may, another decline of the stock market? Perhaps not

It is understandable, if may meet investors with apprehension.

After all, there are equities in a market near the bear that has pushed stocks lower by more than 19% a year. That came after a very promising start for the year, a model who is also produced in 2010. And this year until April, the index Standard & poor 500-stock returned almost 12%.

Will be economic concerns may dash of early signs of optimism once more this year?

Michael j. Cuggino, President of the permanent family of the portfolio of the Fund, sees troubling Parallels. This winter, he said, "you have the feeling that"boy, we are finally out of the forest. " And then all of a sudden you start seeing softer economic signs. »

Those are still another set of concerns from Europe - including the financial crisis and that Britain has slipped into recession the Spain - with high oil prices and a hand of work still-low of the market at home. In April, there is a net gain of only 115,000 jobs, much less than had been forecast.

But many strategists believe that enough has changed that other severe withdrawal is not a fait accompli. "The fundamental point of view, there are a number of differences," said Brad Sorensen, Director of the sector analysis and the market at the Schwab Center for financial research.

Take the price of the gasoline. In the first four months of the year, national action began to sink in May that soaring pump prices, weighing on the consumer already poorly. In early May 2011, a gallon of unleaded regular averaged $3.96, according to the Energy Information Administration. Which has increased 37 percent from the same period in 2010. So far this year, gas remains uncomfortably high, but at $3.83 a gallon on average fuel is actually less expensive that it was a year ago.

This is a critical point. Ned Davis Research analysis showed that the rate of change in price of gas is an important influence on the attitudes of the investors. Researchers there found that only when the pump prices jump more than 30% over a period of 12 months no actions tend to lose ground. And when the fuel prices have fallen over a period of one year, the s. & P. 500 averaged 12.8% of earnings.

Mr. Sorensen added that there were another big difference this year. Although oil prices are on the rise since January 1, it is not the price of many other products. Since the end of the year, have been the price of corn on the dish, wheat fell slightly and natural gas sank more than 23%.

Why is it important? In 2011, global fears about inflation, especially around the high cost of food in emerging markets, has led central banks around the world to increase interest rates. This year, the policy makers in many of these areas - including China and the India and even in Europe, the European Central Bank - have been lowering rates to boost growth. Last week, the Reserve Bank of Australia reduced rate of half a percentage point, citing the weakness of the economy and mild inflationary pressures.

"This significantly change the image of recent years," said Mr. Sorensen.

"Jeffrey n. Kleintop, senior strategist market of LPL Financial, said the Central Bank rate cuts" should help to mitigate the fears of global recession evident in the two years of spring slides. »

Of course, with treasuries 10 years producing little 1.88% today, down 3.7% in May 2010 and 3.29% a year ago, the bond market could be signalling that the economy remains troubled. But James w. Paulsen, strategist main Wells Capital management investment, note that the by-product of these low yields - falling borrowing rates - help consumers in the short term.

He notes, for example, that in May 2011 and may 2010, the average 30-year fixed rate mortgage were about 5 percent. Today, they are below 4%, which should stimulate the refinancing. In addition, household debt service ratio, which measures the debt payments as a percentage of disposable personal income, keeps declining. According to the Federal Reserve, debt payments accounted for approximately 13.4% of income available in early 2009. Which fell to 12.3% in the first quarter of 2010, 11.2% in early 2011 and 10.9% late last year.

During this time, the image of the profits of the business seems much brighter that he has also recently that there a month. In April, Wall Street analysts were forecasting growth flat profit of less than 1% for companies in the s. & P. 500 in the first quarter. But with autour 85percent of these companies having reported their results, forecasts of the consensus for the growth of earnings have increased 7.2%.

Finally, there is another factor that could buoy the market in spring and summer. Brian d. Singer, head of strategies global macro to William Blair, noted that in 2010, the threat of the possible expiration of the Bush reduced year-end tax could have accelerated activity that would have normally taken in 2011. That may have further weakened the economy last year, he said.

With these same defined new tax cuts expires at the end of this year, this could still accelerate 2013 activity in this year, Mr. Singer said, the economy in 2012. He said that this is one more reason to think that "it y more differences than similarities between this year and 2011.".

Paul j. Lim is the editor of money magazine. Email: fund@nytimes.com.

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