How could the stock market have staged such an impressive rally last week after so depressing a five-week decline?

There are still a lot of optimists among money managers and those who earn a living on Wall Street. And these folks believe deep down that the economy isn't in all that bad a shape, that tensions in the Middle East are only temporarily aroused, that the federal budget deficit problem will be solved and that a cure for the common cold will soon be discovered.

Even as the the press is convicting and executing the stock market, and as small investors are running away in fear, these Wall Street pros are convinced that there is still life in the old bull.

That optimism could turn out to be a short-term positive factor, but, ultimately, it could be the market's undoing.

First, the good side.

Having all these optimists around is beneficial because it gives support to a rally like last week's, which was based, essentially, on the debatable view that tensions had lessened in the Middle East.

Even as President Bush was proclaiming that he wasn't any more hopeful about a negotiated settlement with Iraq than he was a few days ago, and even as Iraqi diplomats were being expelled from the United States, Wall Street was declaring -- through a rise in stock prices -- that the Middle East situation had been diffused.

That sort of rally is what occurs when there are enough optimists willing to buy on dips in stock prices on flimsy excuses. You get convincing rallies that are, essentially, merely pauses in bear markets.

These types of movements are good for professional traders who can get in and out of the market at a moment's notice. But they aren't good for small investors who have to stay put because of high transaction costs.

Now for the downside of having too many optimists:

It means that if fundamental factors should turn against the market, there will be a large number of people heading for the door all at once.

And having too many optimists with the Dow still above the 2600 level means that there is still plenty of room for the market to fall apart if something goes wrong.

What fundamental factors would bother the stock market?

For one thing, the situation in the Middle East could get hotter at any moment. Despite conciliatory comments last week, there are still troops ready to duke it out. And even if the Middle East settles down, the market would react unfavorably if oil stayed at, say, $25 a barrel.

And then there is the U.S. economy. Even if the war in the Middle East is avoided, there is no way to delay the reporting of corporate earnings in the middle of October. So if the market has a respite from worry, it will last only until the dreary corporate profits start appearing.

And then there are the auctions of Treasury securities -- $18.4 billion in three-month and six-month bills that will be sold right after Labor Day. While those aren't the most important auctions, the bond market will be very alert to any blip up in interest rates.

If interest rates remain uncomfortably high, or if the Federal Reserve can't lower rates because of the Treasury's extremely heavy borrowing needs, that too could annoy the stock and bond markets.

To top it all off, the government releases its unemployment figures for August on Friday. The July rise in unemployment to 5.5 percent created enormous concern in the financial community about the possibility of a recession. And the August figure could be equally unnerving.

If you decide to try to get in on the current stock market rally, just remember that there will be lots of opportunities in the coming weeks for all those optimists to convert.

Why isn't anyone else interested in owning United Airlines?

UAL Corp. is a very profitable company. It flies to some of the most exotic foreign cities.

Yet in all the months that the airline's unions have been trying to put together a buyout of its parent, UAL, no other bidders have stepped forward.

There may be a simple explanation. Wall Street sources close to the UAL situation say the airline's unions have privately threatened to wage a strike against anybody who tries to buy the company. The unions appear to want no offers that compete with their own.

This threat, said a source, may have caused other potential bidders to back off. After all, he said, what acquirer in his right mind would buy a company that immediately would be struck? And what bank would lend money to someone who's buying a company that would likely be the target of a strike?

So, mysteriously, over all these months, nobody else has made a bid for UAL. And even now, with UAL's price way below its peak, no other interested parties have stepped forward to compete with the bid from the unions.

In early August, UAL's unions were given two additional months to come up with the $4 billion in financing they need to buy this airline. The unions and their advisers are now said to be trying to restructure their original $200-a-share offer.

Coniston Partners, UAL's biggest shareholder, is also said to be ready to wage a proxy solicitation if the union bid fails and UAL's board of directors fails to come up with an alternative that would improve the price of the airline's stock.

The big question is: What if the unions don't like what the board comes up with? Is there a strike in UAL's future?

John Crudele is a columnist for the New York Post.