NEW YORK — With all the predicaments facing the markets these days — credit scarcer, oil near a record $90 a barrel, home prices in the dumps — it would be logical if investors were shoving money under their mattresses instead of into stocks.

But logic doesn't always prevail on Wall Street.

The Dow Jones industrial average plunged almost 400 points yesterday, its fifth straight loss. Yet Wall Street's pundits did not waver on projections that share prices will rise again after companies finish reporting quarterly financial results.

"There are a lot more people who are bullish than bearish, and there's a mentality that even a pullback would create an opportunity to buy," said Todd Leone, managing director of equity trading at Cowen & Co.

While there are worries about the economy heading toward a mild recession, investors are still energized by the growth potential of U.S. companies — which might have had their most challenging quarter in five years, but are still sitting on large cash stockpiles and, in many cases, have overseas operations.

Furthermore, Wall Street doesn't expect the credit turmoil will send a shockwave through other parts of the economy.

The credit markets appear to be relatively healthy compared to the anxieties that existed just a few months ago, especially with a number of big private equity deals receiving funding that many feared would never go through. There also appears to be little curb in consumer spending in the face of higher gas and food prices, and the Federal Reserve is widely expected to cut rates at its Oct. 30-31 meeting.

"Bull markets really don't die of old age," said Philip Dow, managing director of equity strategy at RBC Dain Rauscher. "The public might not be very bullish looking at what happened this week, but institutions are because there's a feeling that you can't miss the upside in trading."

The market's retreat yesterday creates a buying opportunity for stocks that some investors feel were oversold. Once investors absorb the brunt of third-quarter earnings releases, traders believe the market can rebound.

Wall Street still has a ways to go before getting a full picture of the quarter. Of the 123 companies that reported through last week, 67 surpassed estimates and 51 didn't.

Howard Silverblatt, Standard & Poor's senior index analyst, still expects next year will see the return of the double-digit profit growth that ended in the second quarter. But, he said, there are still a lot of variables.

"The fourth quarter outlook is changing as new earnings guidance emerges, oil prices continues to rise, the Federal Reserve October meeting gets closer, and of course, as every housing and employment numbers is released and restated," he said.

"It's going to be bumpy," Silverblatt said.