REVERSE PSYCHOLOGY

Bad News Good for Dow?

Recent days have seen horrifying job losses, a renewed financial crisis, and dwindling consumer spending—so why has the stock market posted major gains in response? The answer, according to Newsday: With stockbrokers hoping for new federal bailouts to prop up an ailing financial sector, bad news becomes perversely welcome. The worse things get, the closer new measures to increase banks' capital and boost government spending come to reality, as frightened politicians look to respond with quick, decisive action. "All focus right now is really on Washington," a senior market analyst at IG Markets in Chicago tells the paper.