Job cuts = higher stock market?

We’ve come to expect the stock market to be a little irrational, but rallying when job cuts are sinking the economy as it did today?

Well, it sounds crazy. And, it is hard to imagine what good news traders could see in massive layoffs announced this morning. Sprint announced 8,000 in job cuts. Another 20,000 layoffs at Caterpillar were announced and 7,000 cuts at Home Depot. And, that was just this morning.

Truth is traders this morning were focused on some good news rather than the abysmal jobs numbers. First off, the housing market actually produced good results in December for a change in pace, with existing home sales rising 6.5 percent. Better yet, inventories fell 11.7 percent to 3.68 million, and that is a 9.3 month supply, down from a 11.2 supply in November. There was also good news in the announcement by drug giant Pfizer. It is buying Wyeth in a $68 billion deal – assuring the markets that big acquisitions are still happening despite the recession. Also, the index of leading economic indicators posted a better than expected reading.

For more of Gerri’s Top Tips, watch CNN weekdays at 11:15 Eastern Time.