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Go ahead, I dare you — explain how the stock markets really work

The U.S. stock markets closed up yesterday. They remain, at this point in the late morning where I live, on a healthy uptrend.

But yesterday the only economic news I heard was bad news: crude oil prices were at a new high; housing foreclosures continue at a record pace; the consumer price index to the biggest or one of the biggest monthly upticks ever, etc.

If you take the long-term approach to investing, I have always been told, the best investment you can make is in the U.S. stock market. Investors over the last couple of years would be willing to disagree.

But whether you examine the stock markets and their workings long-term through a magical financial telescope, or short-term through a magnifying glass of financial details -- I defy you to give me an explanation of how the markets REALLY work.

Of course, I suppose people who really have it figured out are those folks who have become wealthy through investments. Sadly, I am not one of those people. Certainly it seems a general pattern to me that "bad news" about the economy and the state of our nation causes the market to thrive; "good news" such as increased jobs, lower gasoline prices, etc., causes the market to plummet.

Except when good news runs the markets up and bad news plunges them downward.

I don't get it. Ah, well, what do I know? I'm just a guy who reads the papers.
[tags]economic news, U.S. stock markets, stock investing, financial news, just a guy who reads the papers[/tags]