Run-up in stocks isn’t out of sync

NEW YORK – If you’re wondering what’s the deal with the recent run-up in stocks, join the club.

Fears that the economy is slowing rapidly were confirmed on Friday when the government said gross domestic product rose at only a 1.6 percent annual pace in the third quarter, the slowest in three years. Home prices also look to be in a free fall in many areas and central bankers say they’re still worried about a reigniting of inflation.

That hardly seems like a combination destined to push stocks ever higher.

Some on Wall Street say the stock gains and signs of economic weakness aren’t as much in conflict as it would first appear. They point out that corporate profits are on track for their 18th consecutive quarter of double-digit gains, and crude oil prices have pulled back to their lowest levels in 11 months.

Interest rates also are still relatively low, as is the nation’s unemployment rate, which means jobs are still plentiful. And a recent batch of earnings from retailers show consumers are still willing to open up their wallets.

Also, the stock rally isn’t as stunning as investors might think. Shares of the 30 large companies in the Dow index have risen more than 90 points on only 10 days during the three-month run. Moreover, the Nasdaq composite and Standard & Poor’s 500 index – both considered to be better barometers of the market as a whole – have only advanced about 6 percent and 10 percent, respectively.