Short-term concern on Wall Street appears to be yielding to long-term confidence - for some analysts, at least. Their key reasons: (1) the inevitability of progress on the federal budget deficit and (2) good corporate earnings prospects in an enduringly disinflationary economy.
From a technical point of view, the stock market ''correction'' has now succeeded in depressing virtually all sectors of industry on a rotating basis, beginning with the ''new issues'' market (in particular high-tech) last June and , since early January, hitting even blue chips.
Scores of good stocks are at bargain prices. That perception makes many analysts believe buying opportunities are irresistible: hence a feeling that the downturn is ending its extended run.
The Dow Jones industrial average moved ahead 10.05 points last week, with an especially strong rally - 20.31 points - on Wednesday. The Dow was virtually unchanged Monday and Tuesday; Thursday was skewed by the effects of a late winter storm on the East Coast that sent many traders home early. On Friday, the Dow closed at 1,164.89.
Signaling further economic expansion into the summer was February's 0.7 percent rise in the index of leading indicators.
Few analysts today are as bullish as Lee H. Idleman, chief of Dean Witter Reynolds's investment policy committee. Mr. Idleman believes that both the bond and equity markets have bottomed out and that a big, sustained rise is inevitable.
''We're looking at a target of 1,450 (on the DJIA) over the next six to 12 months,'' he says. Idleman cites a study of 58 years of returns on various investments as showing that ''common stocks, over time, are by far the runaway winner.''
Longer term - which could be an economic cycle or two away - Idleman notes that earnings multiples foreshadow an enormous rise in the Dow: ''We went on record in mid-1982 that a 3,000 target by the end of the decade was reasonable, '' he says. ''We continue to stand by that statement.''
His ideological opposite is Richard Yashewski of Butcher & Singer. What troubles him is that not enough of a ''correction'' has occurred so far, not enough institutions have sold equities to build up high cash reserves, and trading sentiment has turned prematurely bullish.
''Money makes the market go,'' Mr. Yashewski says, ''and we don't see enough money on the sidelines to fuel a big rally.'' Moreover, he notes, ''before a bear phase is completed, the bull must be disbelieved.''
Yashewski says it is not at all unlikely that Wall Street is seeing a ''junior bear market.'' A drop to 1,050 or 1,000 in the next two months is possible, he says.
Between the Idleman camp and the Yashewski camp is a middle-of-the-road group holding the view that the Dow at least appears to be stabilizing.
''An increasing number of observers seem to be thinking,'' says Eric Miller of Donaldson, Lufkin & Jenrette, ''that the stock market has been tracing a bottom the last months and that the risks are minimal. There are few superbears, but plenty who lack conviction.''
Encouraging many analysts is the likelihood that a federal budget reduction package will be hammered out in Washington. Republicans support a plan to reduce the deficit by $150 billion over three years. Democrats want to cut $182 billion.
More important, neither party advocates reinflating the economy to bring down high interest rates. Fiscal restraint seems to have carried the day - even if a compromise budget plan has not yet been devised. This represents an important change in attitude and signals many investment strategists that the disinflationary environment is here to stay.
''Once the election is past,'' says Jeffrey M. Applegate, E. F. Hutton's political economist, ''and the deficit/interest rate connection is even more inescapable and the impact of that on continued growth more threatening, larger and more significant action will be taken to reduce the deficit path in 1985.''
Analyst Miller cautiously notes that ''the market, rather than macro (economic) developments, may have to provide the clues that a better investing environment is near at hand.'' To get a jump on rivals, however, many investors are apparently doing the reverse, assuming macroeconomic - specifically, federal budget - improvement by 1985. This process is known as ''discounting news into the future.''
''The stock market,'' the bullish Mr. Idleman says, ''already is taking some account of a solution to the deficit problem - a solution which may not be apparent until we're up 100 points on the Dow.''
The bearish Mr. Yashewski is not so sure: ''We'll be the first to be bullish when sentiment is way down. But we're not there yet.''