That’s the army of stock players. Thanks to a slew of sunny second-quarter earnings reports in recent days, which drove up the Dow Industrials more than 300 points in the past week’s final two trading sessions, many impressionable investors have begun scooping up equities again.
In the process, they’ve virtually ignored some very pertinent facts: In brief, the latest earnings numbers were up against weak year-earlier comparisons, which means the vigor of future gains figures to level off sharply in the quarters ahead.
Likewise, much of the earnings strength, as it was in the first quarter, reflected sharp cost reductions, namely substantial layoffs and hefty cutbacks in capital spending, trends which must be reversed if the economy is to start percolating again.
Surprisingly, Big Ben was also ignored by many investors’ in their renewed craving for equities, which sent the Dow soaring 201 points on Thursday amid rosy earnings reports from such corporate biggies as Caterpillar, Microsoft, UPS and Triple M..
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