News Summary: Why do stocks soar in weak economy?

AP News
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Posted: Sep 14, 2012 5:35 PM
News Summary: Why do stocks soar in weak economy?

STOCKS VS. ECONOMY: Economic growth is pitiful, unemployment is high and the nation is at risk of another recession. Yet the Dow Jones industrial average has rallied to just 4 percent shy of an all-time high.

MAIN MAN: To explain the contradiction, start with one guy: Ben Bernanke. Bernanke, the Federal Reserve chairman, last week announced sweeping measures to lift the economy.

PAST AS PROLOGUE: There's ample reason to think Bernanke's prescription will work. The measures are the Fed's third round of so-called quantitative easing. The earlier actions were rocket boosters for the stock market.