IF Wall Street is concerned about the outcome of the November presidential election, it has not shown up in such major stock market barometers as the Dow Jones industrial average, or the NASDAQ over-the-counter composite.
With several polls showing Arkansas Governor Bill Clinton now in first place, the market's current performance may be good news for the Democrats. After the withdrawal of Ross Perot, the market rose slightly, reflecting relief by investors that the race would probably not be forced into the House. The Mexican stock market also shot up. The United States market did retreat a bit on Friday over concerns about the weak economy.
Since the election is still three months away, the market could yet register its displeasure. "But so far there has been nothing that would indicate skittishness by the investment community," says Dennis Jarrett, an official of Kidder, Peabody & Co., an investment house.
Some market watchers, however, reverse the coin; they say that instead of showing a sense of ease about Mr. Clinton, the stock market is actually signaling a Bush victory. "What the market is saying is that investors shouldn't worry, that Mr. Clinton is not going to win," says Gene Jay Seagle, a vice president of Gruntal & Co. "Wall Street also knows that the Federal Reserve Board will keep pushing interest rates down" until November to restart the US economy, Mr. Seagle says.
Still, most market technicians say that if Wall Street really felt threatened and assumed that a Clinton White House would somehow resort to massive federal spending, higher taxes, and excessive cutbacks in defense - the type of economic "liberalism" abhorred by the business community - the Dow or some other market indicator would be flashing red lights. So far, that has not occurred. "The market is not terribly upset about [the recent] Clinton surge," says Jeremy Siegel, a professor of finance at the Wh arton School of the University of Pennsylvania. The financial community "probably prefers President Bush; but it could live with Clinton."
While most Americans likely assume that rising stock markets and Republican administrations go hand in hand - since most financiers are Republicans - "stock markets have done very well under Democratic presidents," Mr. Siegel notes. He points to the Roosevelt administration in the early 1930s, when stocks rose, and to the early `60s, under John Kennedy and Lyndon Johnson.
Looking back to 1916, the stock market has performed about the same in years following the election of Republican and Democratic presidents. In each 14 month period following a presidential election from 1916 to 1984, the average market rise under Republicans and Democrats has been equal: about 4 percent, says James Stack, a market analyst who heads up InvesTech Research, an advisory firm. Add in 1988, however, when the market rose sharply (up 29 percent) in Bush's first year, and the GOP gets a slight e dge overall.
But Democrats hold their own. The market shot up 61 percent in the first year of the Roosevelt presidency; it shot up 3 percent in Harry Truman's first year; it went up 26 percent in John Kennedy's first year. By contrast, the market rose only 4 percent in the first year of Dwight Eisenhower's presidency; it lost 16 percent in Richard Nixon's first year, and dipped 5 percent in Ronald Reagan's first year. The decline in Mr. Nixon's first year was particularly unhappy for investors. The "great bull market
of the 1960s ended one month after the  election," Mr. Stack says. "The stock market then proceeded to fall for the next 17 months." He says that markets since 1916 tell three tales:
* Following elections in which public expectations were very high (such as a landslide), the market has tended to produce disappointing results.
* Following elections in which expectations were low, such as a close outcome, the market has tended to do well over the next 14 months.
* The market does much better in the year after a nonincumbent is elected than when an incumbent is reelected.