The Tao Of The Dow (MSFT)(HPQ)(PG)(CSB)(NWS)

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As The Wall Street Journal points out, the DJIA is up 6% in a month. That is because, if results from financial firms in the index are backed out, the rest of the companies are doing OK, The paper writes "The best-performing sectors have been utilities, industrials, technology and health."

That opens the door, ever so slightly, to the question of whether the economy is in full recession or if the slowdown is going on in big pockets where a firewall might be built to keep trouble from spreading. The argument against this is that the economy is now global and industries are more dependent on one another than they once were, but that is a rule and not a regulation.

Results from firms including Microsoft (MSFT) and HP (HPQ) have indicated that the tech sector has not been torpedoed. Consumer goods companies like P&G (PG) and Colgate have done well enough. Media companies including CBS (CBS) and News Corp (NWS) have said that they see no slowdown in their core businesses. Metals, agriculture, and energy companies have done unusually well.

There is still hope that the "recession" is substantially contained in the financial, housing, retail, auto, and airline sectors. Earnings for Q1, most of them out in late April will confirm whether or not that is true.

If the economy does not move into full retreat it is because industries are less interdependent than economists would have Wall St. believe. But, economists are almost always wrong, half of the time.

Douglas A. McIntyre

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