Wall Street: Looking Around the Corner

The stock market lives by its crystal ball. For the past five weeks, the belief that interest rates have passed their peak has lifted share prices and investors' spirits in approximately equal measure. The "baby bank rally," as brokers have dubbed the winter rebound, draws some of its support from cuts in the prime lending rate, from 8½% to 8%, by a handful of small banks. Though executives of most major banks have scoffed at the reductions as premature, last week's mix of economic fact and forecast strengthened Wall Street's conviction that easier money is on the way. One indication:...