Jobless claims hit a 26 year record and the DOW is up

[ThomWV]

Jobless claims now total over 5 million (http://money.cnn.com/2009/02/26/news/economy/jobless_claims/index.htm?postversion=2009022608) but as I look at the DOW Jones Industrial Average I see it is up about 120 points.

So, what does this tell me? It would seem that if a lot more of you working stiffs would lose your jobs my retirement investments might return in value to the ruse of the Republican years. Now someone tell me the world isn't up side down.

[ixion]

1. from what I've seen, Wall St. loves it when the jobless numbers rise...

shows their true feelings about Main St., IMO.

[Veritas_et_Aequitas]

5. While I agree with you in sentiment

the data doesn't bear that out. Over the last few months, rising jobless numbers and layoffs coincided with a tanking DJIA.

The day is still young, though. Let's see how far up/down we'll be at 4.

[Warpy]

9. Just old thinking that no longer applies

but the lemmings who drive the market just haven't caught up to it.

Back in the bad old days, letting people go meant a company was getting leaner, that profits would rise. Those people would find jobs elsewhere.

Now it just means there will be that many fewer customers out there for all the companies because there are no other jobs to be had.

Back in the 80s, there was a study done of corporations that did mass layoffs to boost stock prices. The study found that corporations that dealt with temporary tough times by cutting hours but retaining trained employees outperformed the mass layoff corporations over a remarkably short period of time and did much better over the long haul.

The lemmings still haven't caught on, though, and think layoffs, furloughs, and firings are good news.

By the time the lemmings catch on, it'll be far too late and they'll all be sitting around a fire in an oil drum wondering what the hell happened.

[customerserviceguy]

2. Because it really doesn't make any difference

the stock market is just a gambling casino where people try to see if they can outrun herd mentality. Ever see a giant flock of birds suddenly change direction without an obvious reason? Everybody wants to be lead bird.

You may as well ask why the roulette ball stopped on red rather than black on the last spin.

[ThomWV]

7. Your argument fails on one point

Dividends. Metaphorically its your lead bird turning when he sees a kernel of corn on the ground.

[customerserviceguy]

12. I guess there are some things that birds see that I don't

but with the dot-com boom, there really weren't any dividends to attract birds.

Once upon a time, the stock market was possibly a way to raise the capital that capitalism depended on, today, it's just a gambling parlor, where one need not even own the underlying stocks upon the fortune of which one is betting.

[Veritas_et_Aequitas]

3. They're probably ignoring the jobless report and proposed tax hikes

and are optimistic about the ongoing bank negotiations and the budget.

Besides, we still have another 4.5 hours left to the trading day. A lot can happen.

[scheming daemons]

4. Job losses are a lagging indicator on the economy....

Job losses happen last.... and jobs recover last... in any recession.


The markets are already moved past the job losses... even though they'll continue for the next couple quarters.

[Mz Pip]

6. Obama put out his budget today.

That's what's driving the market up.

[AZ Criminal JD]

13. Up? Are you upside down?

[Mz Pip]

15. It went up

for a while. :shrug:

[earthside]

8. The Stock Market is a Casino

The only thing that you can tell from the stock market are broad trends.

Day-to-day the market is run by speculators and gamblers ... it doesn't mean much.

For instance, no matter how important and smart all those talking heads on CNBC think they are -- they are in truth just shills for commissioned brokers and financial advisors.

Considering all the bad economic news today, a rising Dow only confirms to me just how out-of-touch the traders are ... and it reminds me why I am glad to be OUT, OUT, OUT of the stock market.

[sarcasmo]

14. Exactly, even shadier than a casino.

[spanone]

10. President Obama promised more regulation, maybe people are feeling better about investing

[Venceremos]

11. It's probably bottom feeders

(also known as bargain hunters or vultures). I doubt the rise has anything to do with jobless claims, Pres. Obama's budget, etc. Considering the mass sell-offs lately, the rise is probably due to bottom feeders snatching up undervalued shares.

It's typical to see a temporary rise in the stock market after several days of decline, because bottom feeders are taking advantage of the decline by buying up potentially undervalued stocks. They calculate that the market's valuation of certain companies is based on sentiment/fear and does not reflect their true value.

Edited for spelling.