Stock market going up. Sign of better times ahead?

Can a buoyant Wall Street start to make Main Street feel better about the economy?

Well, the market is trying.

On Wednesday, investors pushed the market averages to five month highs: The Standard & Poor’s 500 index closed at 1178.10 – up 8.33 points, or 0.71 percent, for the day. Since March 2009, the S&P average has rebounded 76 percent.

During the same period, the Dow Jones Industrial Average has been up 69 percent, closing Wednesday at 11096, up almost 76 points for the day.

“We are definitely in a bull market,” says Sam Stovall, chief investment strategist at Standard & Poor’s Equity Research in New York. “Our definition of a bull market is a 20 percent advance off a bear-market bottom that lasts at least six months.”

Even more important, Mr. Stovall says, the stock market could be getting ready for more gains in the months ahead. In the third year of presidential terms, the S&P has gained an average of 17 percent and has risen in 19 out of 20 cycles, he notes.

“The stock market could be rising in anticipation of a favorable third year,” he says.

However, almost all those gains in other presidencies took place because investors were expecting Washington to spend more money to stimulate the economy before the next election, says Jeffrey Kleintop, chief market strategist at LPL Financial in Boston.

“This time, we’re seeing a contraction of the stimulus,” he says. “State and local governments are cutting; the Feds are cutting.”

For that reason, Mr. Kleintop says he expects the market to rise, but only by the high single digits next year. “So much is dependent on the Federal Reserve keeping interest rates down next year, and that will be a tough challenge,” he says.

For now, though, the market has been focused on some shorter-term signs – specifically, companies’ earnings reports. On Tuesday, Intel, the computer chipmaker, said profit jumped 59 percent. And on Wednesday, JPMorgan Chase reported better-than-expected earnings.

At the same time, reported the Mortgage Bankers Association, many consumers got off the fence and rushed to their banks to refinance their mortgages.

“It was pretty much a good-news day,” says Robert Brusca of Fact & Opinion Economics in New York. “We even had Chilean miners getting rescued, which made everyone feel good. There has been too much bad spin on everything.”

While the news might be good for large companies like Intel, small businesses are still struggling, says Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Fla.

“Ultimately, we need the small firms for expansion,” Mr. Brown says.

What has been driving the market higher, Brown believes, is anticipation of the Federal Reserve’s next step in monetary easing: The nation’s central bank may begin to buy long-term Treasury notes. By buying these notes, the Fed hopes to lower longer-term interest rates. It has already dropped short-term rates to almost zero.

On Friday in Boston, Fed Chairman Ben Bernanke will deliver a speech on monetary policy in a low-inflation environment. “We may get some color on what this monetary easing is going to look like,” Brown says.

On Wednesday, the prospect of the Fed lowering long-term rates helped drive up the stocks of material producers, energy companies, and industrial stocks, Kleintop says.

“People are buying these stocks in anticipation of the Fed reinflating the economy,” he says.