Individual investors still seem to be reluctant to join large institutional investors in the stock market's spectacular buying spree, local brokers said yesterday.

But the brokers speculated that higher stock prices, the fading attraction of money market funds and the availability of funds from All Savers accounts could combine in coming weeks to bring the public onto the buying bandwagon.

"I still don't think the public is in here yet," said Les Silverstone of the Washington office of Dean Witter Reynolds. "I think there's a lot of money that will be coming into the stock market."

"We're seeing not just the institutions, we're seeing medium- to large-size investors," said Pat Ryan, an analyst at Johnston Lemon & Co. "But we don't think the public sector, the small investor, has been tapped yet."

"A large portion of the public has yet to come in," said Elliott Benson of Ferris & Co. "As these prices go higher, they'll be attracted right in, like a firefly to fire."

Still, analysts don't see those investors getting burned. The consensus seems to be that the rally is the real thing, in spite of the economy's problems. Declining interest rates and abating inflation, however, are seen as lures to smaller investors, and analysts say that more individuals will become involved in the rally as confidence in the economy grows. "They're coming in gradually," Benson said. "When it comes in in an avalanche? . . . That's something I can't really answer."

The individual investors who are in the market are going for steady-income, blue-chip stocks, and are shying away from more speculative issues, analysts say. The investors apparently are looking for investments to replace money market funds and other interest-rate-linked investments that are losing their luster as interest rates drop.

"There's an awful lot of money in those money market funds, which are also not providing the yield they used to," Benson said. "I think some of those monies are now moving around, looking for higher returns." Utilities and some bank stocks are among the type of investments Benson said are outperforming money market funds.

Brokers are particuarly excited about getting their hands on some of the billions of dollars that have been sitting for the past year in All Saver certificates, which are coming due now. The analysts believe many people will move that money into stocks.

"The amount of money that's available is just astronomical," Silverstone said of the All Savers and other funds that can be invested. "I've never seen so much money around."

And Silverstone said the higher stock prices already are attracting individual investors in greater numbers than before the rally. "We're seeing a lot of people we haven't seen in years, people who have a lot of money in money market funds," Silverstone said. "They're saying, 'Am I missing something? I don't want to get in too late.' "