"With business profits flourishing, the environment is positive for stocks, even with interest rates rising. Corporate earnings were up 28 percent on a year-over-year basis in the first quarter while the market was essentially flat. Second-quarter earnings [growth] could also approach 20 percent. Keep in mind that annual earnings growth for the S&P 500 over the past 20 years is only 8.3 percent."

Janet M. Brown

NoLoad Fund X

San Francisco

"Although stocks have been under selling pressure in recent sessions, relief could be on the way. The Short Interest Ratio on the NYSE has moved up to 5.82 percent, which is well above its February lows of 4.50 percent and within striking distance of its peak reading of the year and only 1 percent away from a five-year high. Another positive for the bulls is the fact that the public has been shorting at a much greater rate than specialists over the past several weeks."

Dan Sullivan

The Chartist Mutual Fund Letter

Seal Beach, Calif.

"Investors have a lot to ponder as the third quarter moves along. . . . That said, earnings appear set to increase further in most cases; the economy is in good shape, and the Fed is likely to proceed gingerly on the rate front. Conclusion: Adding it all up, the stock market outlook is mixed and we are neutral on equities at this time."

Value Line Selection & Opinion,

Value Line Investment Survey

New York