Dow climbs: Look for a break in the doom and gloom clouds to weather economic storm

Quick, everyone, knock on wood. Cross your fingers. Hold your breath. And rub those rabbits’ feet. The Dow Jones Industrial Average climbed more than 379 points today (Tuesday, March 10) and we don’t want to jinx it.

The climb — nearly a 6% gain — marks the largest single day increase since November 2008 and is the closest thing we are going to get to a rally right now. It came this afternoon, just one day after stock price declines by tech companies like IBM brought stocks across the board down and the S&P 500 dropped 6.85 points to 676.53, its lowest close since September 1996.

That was after Warren Buffett said the economy has "fallen off a cliff" on CNBC and as economists continued to predict that the global economy will contract for the first time since World War II in 2009. Well, thank you, Mr Buffett and the like. Tell us something we don’t already know. 

Despite Monday’s drop and Buffett and the like’s doom and gloom, according to reports more than 90% of the properties on the New York Stock Exchange moved upward today after Citigroup announced that it had a profitable January and February and Rep Barney Frank said that the SEC may reinstate the "uptick rule" (aka the "plus tick rule," the uptick rule stops short sellers from adding to the downward trend of a stock price when it is already experiencing sharp declines. It had been eliminated by the SEC in July 2007.). 

As an economy, a global economy, we are at the point now where the skies are dark and foreboding, the winds are biting, and the rain is falling hard. However, even in the worst storms there’s sun behind the clouds. And if you look carefully enough, you’ll fine rays poking through.

The problem is people have been so focused on the negative that they haven’t been looking for the positive. I know, I know. Right now readers of this blog are thinking, "Who is she to talk? Her byline has been on 90% of the downturn stories EDN has published." Yup, it has. Unfortunately, as EDN’s news and business section editor, most of the layoff, bankruptcy, plant closures, get-out-your-flood-boots-cause-the-water-is-getting-high stories fall on my desk.

But even I, someone who started cautioning of a coming recession in January 2008 when the markets were relatively steady and who has since typed hundreds of thousands of words on this downturn, can find some hope in this hell. Take for example, TSMC’s upgraded Q1 sales guidance released today.  True, the guidance isn’t great. Sales are expected to be down from Q4, which in itself was down from Q3. But the foundry said sales will decline less than previously expected. And that news came after Chartered earlier this week lowered its loss estimate. Again, not great, but it’s an improvement.

There has also been research released that suggests tech salaries are on the up and that while the number of jobs are few, they are out there. A good friend of mine who was recently foolishly laid off by his harebrained company yesterday reminded that, yeah, the unemployment rate is roughly 8%, but 92% of Americans are still employed (give or take, depending on when unemployment benefits ran out, off-the-books workers, etc). He’s smart and sharp and has two job interviews this week.

This is not to say we should all put on a happy face and smile like idiots. Serious times call for caution when proceeding forward, but not closed-eye blatant pessimism. Keep your eyes open for small improvements and focus on getting through this economic storm, not drowning it.

What do you think? Share your thoughts on the stock market, the economic turmoil, and the employment picture below.

*Editor’s note: FYI, I do not own any tech stock. It is considered unethical for a journalist to hold stock in what they report on.