High food prices, high gas prices, weak job market, stagnant wages... and the Dow is up again. WTF?

Question

Warren Buffett also said that the recession will be longer and deeper than what analysts are predicting. And on top of it all, consumer confidence is at a 16 year low. And the housing market is still going through turbulence. But the Dow hasn't significantly fallen down. It keeps plugging along. What's going on here? Is the Dow even connected to the overall economy anymore?

Answer 1

When certain stocks get low, people buy up the shares of that stock because they can buy the shares much more cheaply when the market is down.

Answer 2

The stock market is merely a betting game; a mirror.  The price of individual stock reflects trader's opinion of the stock's value relative to other stocks.

The DOW and other stock indices plugging along...

not really, averages seem to have been holding their own, while actually their real values have been slipping to the extent that inflation has eroded it.  So stockholders have generally lost, in terms of REAL value, over the past 7 years.

The same holds true for investments seeking an interest rate return, as in savings accounts and money markets.

Answer 3

no it is keyed to what makes people panic...

home sales went up oil went down.. panic subsides a bit.. so the dow goes up.