By Meg Richards
The Associated Press

NEW YORK - Economic data are soft, interest rates are rising and oil prices are at record highs. Earnings have been good, but projections that they will decelerate in the months ahead have flat-lined stocks. What is going on here?

Better economic news, a drop in oil prices or a reduction in global terror fears could go a long way toward stabilizing equities. But a lower-than-expected reading of gross domestic product growth and persistent concern about whether crude supplies can meet rising global demand have only contributed to the downward pressure.

"This tired bull has too many burdens on its back, and certainly the very weak GDP report confirms that the economy is not helping the stock market," said Sung Won Sohn, chief economist at Wells Fargo in Minneapolis.

"The attitude on the part of investors is, 'Show me the positives, show me the results, and I will believe you.' "

With many worried that the Olympics or events leading up to the election might be targets of violence, it could be November before Wall Street feels more secure about the nation's geopolitical position.

For his part, Sohn believes economic data will improve and push the market higher, hopefully by the end of the summer.

Many analysts remain optimistic about the economy's underlying fundamentals.

"There's just a lot of nervousness, even though the economy continues to perform at a healthy level and valuations aren't that high," said Kenneth McCarthy, chief economist with vFinance Investments, Inc.

The more uncertainty there is, the more investors will want to "wait until the fog clears," McCarthy said.

If you have long-term time horizons, it's important to remember that the market never stays down forever, so buying when valuations are low is like bargain shopping, said Janna Sampson, co-manager of the AmSouth Select Equity Fund and director of Portfolio Management at Oakbrook Investments. .

Wall Street is not pleased with the Bush administration's strategy in Iraq or its protracted and costly war on terror, said Charles Biderman president of TrimTabs, and investors are also alarmed by Democratic nominee John Kerry's tax proposals. With no clear front-runner in the race, many hedge fund managers are sitting on cash, he said.