NEW YORK, May 2 (UPI) -- Rebounding U.S. stock markets may be a sign the worst is over for financial markets, but the general economy remains weak, economic analysts said Friday.
After a strong rally Thursday, the Dow Jones industrial average is close to breaking even on the year, while the Standard & Poor's index has regained half its 2008 losses.
"There has been a huge change of sentiment in all of the markets. A lot of the fear has been gone," an investment strategist for MainStay Investments, William Knapp, told The New York Times Friday.
As markets rally, the general economy, including the job market, wages versus inflation, housing starts, consumer spending, corporate profits and the rate of foreclosures, remains in trouble.
An analyst at Credit Suisse, Rod Dubitsky, told the Times an additional 2.8 million mortgages could fall to foreclosures in 2008 and 2009.
But historically, a lag between a recovery on Wall Street and one on Main Street are common and even Wall Street's rebound is not a done deal, some analysts say.
"There are still plenty of downside risks to the economy." portfolio manager K. Daniel Libby told the Times.
