NEW YORK -- After all that has happened in the past few months, many Wall Streeters are finding it hard to muster much enthusiasm for 1988.
The customary chorus of optimistic yearend forecasts for the stock market has scarcely been heard this time around in a financial world still ringing with the reverberations of the Crash of 1987.
The $1 trillion decline that began in late August broke the back of a five-year bull market, and left a lot of standard methods for analyzing the financial outlook in disarray.
"Uncertainty reigns," Burton Siegel, chief investment officer at Drexel Burnham Lambert Inc., said in a yearend commentary. "It's a not-so-brave new world for public policy, economic conditions and investment decisionmaking."
Given the record of the past 12 months, many market seers are understandably leery of climbing very far out on a limb just now.
To get 1987 right, you would have had to predict the dramatic surge in stock prices that carried the Dow Jones industrial average from 1895.95 at the start of the year to 2722.42 on Aug. 25 -- and then the even more drastic drop that followed.
Despite some after-the-fact claims to the contrary, few forecasters came anywhere close to calling that extraordinary sequence of events.
By many of the usual gauges, analysts say, there might be reason to hope for a healthy market in 1988.
For one thing, it's an election year, when incumbents are naturally eager to promote a mood of prosperity and optimism.
Apart from the financial markets, the economy, as measured by such basic criteria as output, employment and corporate profits, seemed in solid shape as 1987 drew to a close.
But after "Meltdown Monday" on Oct. 19, when the Dow Jones industrials fell 508 points, many market-watchers are questioning whether what had been considered the normal rules still apply.
Using standard indicators on such subjects as monetary conditions and investor sentiment, "you get positive projections for stock prices," said investment adviser Martin Zweig in a December report.
"Yet somehow I'm not comfortable here," he added. "After crashes, the market takes its sweet time healing its wounds."
"I'm no longer a bear," said Raymond F. DeVoe Jr. at Legg Mason Wood Walker, an analyst who took a wary view of the market well before the crash. "But I think it's still too early to be a roaring bull."
In Siegel's view, stocks at their early December levels were "attractively valued." However, he added, "there are several reasons to suspect that stock prices will have difficulty sustaining a major rally in the near future.
"It may be some time before there is irrefutable evidence of either recession or continued economic growth. It will be even longer before investors return to their prior levels of risk acceptance."
While prospects for stock prices may be cloudy, it appears clear that Wall Street itself faces some continuing struggles in 1988.
Layoffs prompted by bond market problems had already started at some investment firms when the crash hit. In November, two of the Street's biggest brokerages agreed to a merger, with E.F. Hutton Group to be acquired by Shearson Lehman Bros. Inc.
More realignment and job losses seem almost certain in the new year, given the chilling effects of the crash on such traditional Wall Street activities as underwriting new stock offerings.
The process of reevaluation extends beyond businesses to the makeup of the markets themselves.
As 1987 drew to a close, a half-dozen inquiries and investigations were under way into the systems and trading practices used in the markets before the crisis.
The debate won't end soon on such questions as how the markets need to be strengthened and what blame, if any, for the market collapse should fall on stock exchange specialists, over-the-counter dealers and computer program traders.
Most observers agree that the crash had its share of heroes, including industry officials who kept the market running under extreme stress and federal regulators who provided timely assurances of enough money to keep liquidity from running dry.