The bulls are running again on Wall Street. But the question troubling some leading analysts is whether their hooves are actually on the ground.

In the face of what would normally be considered some poisonous news for the stock market - high interest rates, record gold prices, double - digit inflation and a floundering dollar - the market has moved on heavy volume to what are its best levels in more than a year.

Yesterday the Dow Jones averageof 30 industrial stocks gained 2.42 points closing at 891.63.

Some analyst have explained the market's behaviour by saying that all of the bad news and are now anticipating a peaking soon in interest rates and a gentle slowing in the economy that will ease inflation with minimal damage to output and corporate profits.

"The fundamentals are looking a bit better, the negatives have been pushed back into their respective corners and positive psychology is taking force," Smith Barney Harris Upham and Co. comments in its latest market perspective. "Our advice is to enjoy. It's been a long time coming."

Other analysts are not so sure that things have actually improved, and label such a scenario as wishful thinking.

They note, for example, that total federal and private borrowing for the 12 months ending next June 30 is projected to reach an alltime record level of just over $370 billion - hardly the environment to allow interest rates to abate unless the Federal Reserve Board plans to keep the monetary spigot wide open, thereby fueling inflation.

And while there are signs the economy is cooling from its second quarter surge, there is no indication yet of a slowdown that would allow inflation to retreat significantly, let alone harbinger an actual recession.

"We're not rip-roaring bulls," says Leon Cooperman, head of the investment policy committee at Goldman Sachs. "While the market looks higher near-term, for it to make any significant progress, we would have to see the current business cycle come to an end and see some downturns in interest rates."

Cooperman says that such an outlook is not yet in the cards. "And if the economy turns out to be stronger than expected, and financial pressures turn out to be more intense," the market could be vulnerable thought he believes the downside risk is not very large either.

The best explanation for the market's behaviour does not involve the outlook, so much, as the dynamics of recent trading.

Thethundering herd that has been driving the market forward is made up mainly of so called institutional investors - the pension funds, Insurance companies, mutual funds and bank trust departments - who can account for up to 80 percent of the daily turnover on the New York Stock Exchange.

The portfoliomanagers for these multibillion dollar institutions have been having a hard time keeping even with the stock market averages in recent years, let alone beating them.

Partly as a result of this poor performance record, they havebeen steadily reducing the amount of assets invested in the stock market. In 1972, for example, 74 percent of these institutional assets were deloyed in equities. By last year that number was down to 60 percent, and most recently it had dipped to about 55 percent.

Given the steady increase in overall assets, the amount of dollars that have been held back from the stock market is even more significant, running into the tens of billions.

So when there is the least indication that the market is about to make a move, the performance-conscious institutions, though they may lack conviction, have simultaneously rushed intowhatever opening is available so they won't be left on the sidelines, lagging the market averages once more.

"The fear of missing the trend is the dominant force in this market," said Robert Walsh, a vice president with A. G. Becker Inc.

"Because of the amount of cash they are sitting on, there is a lot of concern on the part of the institutions to get it back into the market," he added, "and that has created a stampede - no doubt about that."

With all of the negative economic news around, "it's a little hard to make much sense about the day-to-day activity in the market," Walsh said. "If history is any precedent we are not in an environment that sits very well with the market for a long period of time."

But the Becker analyst acknowledged these short-term trading factors could well send the market higher in the next few months, carrying the Dow as high as the mid-900s.

The longer-term outlook, in his opinion, is less sanguine. "Overall we think the market is in the process of parking out" he said. He indicated that his firm is in the process of advising clients to get the equity portion of their portfolios down to 30 percent.

But Jack L. Rivkin, senior vice president and research chief at Paine Webber Mitchell Hutchins cautions that "investors can be too smart and anticipate too much." Rivkin believes the economy is continuing to advance and that any prospect of a recession has been pushed out for at least another year.

"An extended period of real sharper slowdown when a recession comes," said Rivkin. "But if an investor pushes out that possibility for another 12 months, he could continue to see the market run away from him. So from our point of view, there's a greater risk now being out of this market than being in it."