Bull market is back — maybe

NEW YORK — The bull market is back, according to at least some definitions of the term.

The Standard & Poor's 500 index this past week posted its best quarterly gain since late 1998. Wall Street's three main gauges are at their highest levels in a year. Investors are more upbeat that an economic rebound, three years in coming, is now under way.

Still, the bull market label gives investors a false hope of future, sustainable gains, according to experts.

"I've seen a concrete definition of a bear market as being down 20 percent, so for bull markets you could say it means rising 20 percent," said Robert Shiller, a Yale economics professor and author of "Irrational Exuberance," which correctly predicted in 2000 the bursting of the tech bubble.

"But it's often misleading to call something a 'bull' or a 'bear' market, because people think you've diagnosed something, when in fact all you've given it is a name," he said. "What they think it means is that it's going to continue."

Indeed, some experts define a bull market as a 20 percent upward move over any time period, while others prefer to see the gain sustained over several months to a year. A small minority refuses to declare a bull market until stock gauges reach a new peak.

There are also "cyclical" bull markets, which run for about a year, compared to multiyear "secular" ones.

Many experts believe Wall Street's current run can be best described as a cyclical bull market within a secular bear market, which began in 2000. Historically, secular markets last about 10 to 15 years, according to Ned Davis Research in Venice, Fla., so stocks could well return to bearish declines in a year or two, if not sooner.

Stocks have already gone through a cyclical bull market recently. Prices rose more than 20 percent from September 2001 to March 2002 following the Sept. 11 attacks. A flurry of accounting scandals, however, soon derailed that rally and stocks eventually fell to multiyear lows on Oct. 9, 2002.

In the current bull market run since Oct. 9, the Dow has advanced about 24 percent, the Nasdaq is up 49 percent, and the S&P has gained 27 percent. The gauges, meanwhile, remain far off their early 2000 peak, when the Dow hit 11,722.98 on Jan. 14; the Nasdaq climbed to 5,048.62 on March 10; and the S&P rose to 1,527.46 on March 24.