As Stocks Soar, Investors Ask: 'Is 5,000 Dow Next?'

MARC GLICKMAN couldn't be happier about the stock market, which has roared ahead more than 20 percent this year, setting new records week after week. The accountant with MCI plunks $150 a month into mutual funds, while also buying individual stocks.

''There have been few times this century when the market has been growing as well as now,'' says Mr. Glickman. ''I'm feeling pretty comfortable about [it].''

He isn't alone. Billions of dollars have poured into stocks from individual investors and institutions such as pension funds. Barring the unexpected, most Wall Street technicians believe the market will keep advancing. ''The trend is definitely friendly,'' says Larry Wachtel, a vice president at the investment house Prudential Securities Inc. ''It would be very hard to abort a market as powerful as this one.''

What's propelling the market, experts say, are rising corporate profits, strong export sales by United States manufacturing companies, low inflation, a revving up of consumer spending, and the Federal Reserve's recent lowering, albeit slight, of short-term interest rates.

Moreover, Wall Street's consensus is that a ''soft landing'' is the likely scenario. Few experts completely rule out a recession or market correction of 5 percent or less, but many analysts are optimistic. The Dow Jones industrial

average, says Ralph Acampora, Prudential's chief technical strategist, could reach 5,000 points this year and rocket to 7,000 by early 1998.

On Friday, the Dow closed at 4,708.82 points.

Recent data from Washington raises prospects for a soft landing, many economists say. The government announced Friday that consumer prices rose 0.1 percent in June. Output at factories, mines, and utilities was up the same percentage, following three months of declines, and retail sales were up 0.7 percent, suggesting that consumers are again opening their wallets to spend.

''We're bullish,'' says Lawrence Babin, who manages the Cleveland-based Victory Diversified Stock Fund, which has $370 million under management.

''It appears the market has broadened out in June and July,'' with additional stocks posting gains. ''We're fully invested,'' with less than 4 percent of our assets in cash, Mr. Babin says. Cash is generally held by mutual-fund managers to meet possible redemptions from accountholders.

''Current gains in the market are based on positive fundamentals,'' such as fair valuation levels, rising corporate profits, and continued modest economic growth, Babin says.

''The underlying fundamentals are about as good as they've been in a long time,'' says Lynn Hamilton, who manages a sister fund of Babin's, the Canton, Ohio,-based Victory Ohio Regional Stock Fund, which has $37 million under management. He is upbeat about capital-goods manufacturing and United States exports and sees no real threat to a continued rising market. He is, though, occasionally bothered by international considerations, such as economic weaknesses in some European economies, he says.

Moskowitz Capital Consulting Inc. in New York notes in its weekly market strategy that the ratio of price to earnings for blue-chip stocks making up the Dow Jones industrial average, with the index at 4,700, stands at 13.3. Moskowitz gets similar results using the broader Standard & Poor's 500 stock index.

This indicates less risk of a big market tumble, considering that the historical average is 14 to 15. It is also ''well below bull-market peak levels of 18-20,'' notes the market letter.

''So present equity-market prices are no higher than the historical averages imply, and while excesses may yet develop, they are not apparent now in the 1995-96 outlook,'' it adds.

But not all market-watchers remain sanguine. ''The very fact that so many people are so excited these days is itself cause for great concern,'' says Anthony Spare, chief executive officer of investment firm Spare, Kaplan, Bischel & Associates in San Francisco, which has assets of $2 billion under management.

The second half of 1995 will probably ''not be like the first half,'' he says. ''Only three times during this century has the market posted a gain of 40 percent or more for the [year].''

What bothers Mr. Spare are the people he calls ''nonbelievers'' who play the market because they feel ''they have to be there'' on account of rising prices. If the market dipped, ''the nonbelievers would quickly pull out.'' A 10 percent drop in the Dow would mean a market downturn just under 500 points in the Dow average. Would a loss of that magnitude help propel an even larger bailout?, he asks. The average downturn this century has been around 8 percent.

James Stack, publisher of the newsletter InvesTech, says there is more complacency about the market than there was before downturns in 1973, '87, and '90. His advice: Be wary about projections based on rosy scenarios.

Stock-trading restrictions installed after the '87 crash - such as how many points the market can drop during trading hours - would likely mitigate a major collapse, says Hans Stoll, director of the Financial Markets Research Center in Nashville. ''But I'm just not pessimistic about this stock market.''

Ultimately, the market's direction will be determined by millions of investors. And what they are saying is they feel pretty upbeat, he says.