How can the stock market be doing so well when the rest of the country isn't?

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(WSBT file photo)

By Jason Overholt

Story Created: Oct 16, 2009 at 9:30 AM EST

Story Updated: Oct 16, 2009 at 9:30 AM EST

It didn't last long, but for the first time in a year, the Dow hit the 10,000 mark. It's a sign a lot of investors have been waiting for.

But Mark Beyler of North Liberty has a Good Question: How can the stock market be doing so well when the rest of the country is suffering so much?”

Professor Jerome McElroy of Saint Mary's College has an answer.

The lines of local workers seeking unemployment benefits shows how for many local families 2009 has been much worse than 2008.

“The stock market is not the economy,” said McElroy.

McElroy is an economics professor. He says eventually a rising stock mark will lead to good things in the overall economy. Investors will have more money and feel better about spending it both privately and on new business ventures

“And so you say the market is up three or four thousand since march, well that suggests in three to six months the economy ought to be moving ahead,” said McElroy.

The stock market moving up is important for many reasons. Not least of which is that if it keeps going up, that may open the door for more baby boomers to retire, which then opens up more jobs for younger members of the workforce.

“But, once again, those baby boomers have got to see that this is a sustained recovery, and that ‘My 401k is up there and so I can safely retire.’”

However, at least for now, many on Main Street are not following Wall Street's climb back to the top.

McElroy says there is a lot of conflicting information about the economy right now that makes it hard for anyone to get a good read. For example: computer company Dell had a good report, but on the very same day it announced consumer spending for September was bad.

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