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Good news for the economy?

March 27, 2009

Daniel Politi at Slate comments on a Wall Street Journal piece about the historically fast rise in the Dow over the past few weeks:

The WSJ fronts a look at how stocks continued to rally yesterday and the Dow Jones Industrial Average finished up 174.75 points. The Dow has now increased 21 percent from its recent bottom, “a new bull market by a common Wall Street definition.” It marks the first time the market has gained 20 percent since October 2007, and it was all achieved in 13 trading days, “making it the fastest 20% rebound from a bear-market low since 1938,” notes the paper. Many think this is just temporary because short-term investors are responsible for much of the increase but they will jump out of the market at the first sign of trouble. Experts say that it seems like many investors are trying to “time the market,” which makes the market more volatile. “Anecdotally, many hedge funds have become more like day traders,” an analyst said. Even if it’s just a temporary rally, many think it could last several weeks and some are even declaring that the bear market might be ending. Of course, many have thought that before only to be bitterly disappointed.

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