Economy Slows, Stocks Surge: What Gives?

Stocks are surging while classic indicators are signaling slump — so what gives? The answer, reports the Washington Post, lies in a bright jobs report and spiking Standard & Poor's 500-stock index. Backers are dissing the bad news as fast as they can finance, says the Post: "Call them the Teflon investors."
 

But analysts warn that risks remain: Europe's growth may slow, UK home prices are falling and a weak US dollar could add up to inflation. When adjustable rate mortgages reset, foreclosures could mean low spending and a bigger slump. "The dynamic of the market right now is, 'Yes, we acknowledge there are problems,'" says one expert. "But earnings growth can still be robust going into 2008."