Small stocks, having led Wall Street out of its 1990 doldrums, have put in a far stronger first-quarter performance than blue chips, and analysts see signs of a new long-term trend.

"It's a buying frenzy," said Robert O'Toole, manager of OTC trading at Shearson Lehman. "You've got a lot of people who want to spend their money."Investors are betting that the earnings of smaller companies will outperform those of their bigger brothers.

Reflecting that view, the NASDAQ has shot up more than 30 percent and the S&P index has climbed 15 percent since the start of the year.

By comparison, the Dow index of 30 industrial companies has risen less rapidly, advancing 12 percent.

Analysts believe the market's appetite for smaller issues is more than just a passing fancy.

Robert Farrell, chief market analyst at Merrill Lynch, said the small stocks are entering a new trend after having trailed big stocks for most of the 1980s.

"My guess is that this is something more than just a catch-up," he said. "The preference towards secondaries will probably continue to build over a number of years, but we'll get speculative phases like right now, that will have to be corrected."

John Brooks, technical analyst at Davis, Mendel & Regenstein, said, "You're talking about a trend here, not just a flash in the pan. This is something that can last at least a couple of years."

The turnaround in the over-the-counter market began with strength in shares of regional banks, retailers, and "a lot of dull stocks that nobody's ever heard of," Brooks said. "And we've had that. You see stocks that have gone from $3 to $5 and others that have gone from $5 to $11," he said.

Farrell said that another sign of the return to popularity of secondary stocks is a shift in advertisements for index mutual funds.

"Index funds generally had related to the S&P 500 and variations, but now most are offering the Russell 2000," Farrell said. "This is another change toward the recognition that secondaries have turned."

The Russell 2000 index is a broad-based stock index of mostly smaller capitalization stocks.