The Stock Market Surged Yesterday Because … Why?

I may be wrong, but it strikes me that the articles that appear in nearly every newspaper every day that describe a particular day’s stock-market movements are pretty much worthless.

They try to pin a cause or two on the effect that’s just been observed, when in fact the effect may have little relationship with the narrow causes being credited. Consider, for instance, this A.P. headline and news brief that appeared on Yahoo! News at about 2:30 p.m. yesterday:

“Stocks Surge to Start Q2”

Wall Street began the second quarter with a big rally Tuesday as investors rushed back into stocks amid optimism that the worst of the credit crisis has passed and that the economy is faring better than expected.

How does the A.P. really know that investors “rushed back into stocks” because they were optimistic that “the worst of the credit crisis had passed” and that the economy is “faring better than expected”?

The A.P. folks sure didn’t learn this from reading their own business headlines. Here are five A.P. headlines that appeared directly beneath the stock-surge news brief.

• “Celent: 200,000 US Banking Jobs at Risk”
• “Manufacturing, Construction Weaken”
• “Ford, Toyota U.S. Sales Down in March”
• “Congress Has Big Questions for Big Oil”
• “U.B.S. Will Write Down $19 Billion”

Here are a couple of stock-market headlines I’d love to read one day:

“Stocks Surge, Reasons Unknown; May Be Nothing More Than the Random Fluctuation of a Complex System”

or:

“Stocks Dive: Three First-Movers Sold Hard and Then Everyone Else Inexplicably Followed”

But I could probably live to 150 and never see that happen.