When Bad News Just Stops Hurting

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After Cisco, bellwether of tech bellwethers, reported dire earnings news and direr layoffs Monday evening, NASDAQ-watchers cringed for another depressing sell-fest — but the markets shrugged it off. TIME personal finance columnist Daniel Kadlec looks around and sees the mood changing: When bad news no longer surprises, it's time for these markets to start climbing back uphill. At least until summer.

TIME.com: Tuesday was supposed to be a bad day. What gives?

Dan Kadlec: There are two ways to look at this. The first is that this wasn't an economy-wide problem. You don't lay off 8,500 employees — 20 percent of your workforce — because of the economy alone. That's a management screwup. And that's why the rest of the tech stocks didn't go down with it — the news was so awful that it couldn't be viewed as industry-wide.

The other way of looking at it is that there's been so much bad news already that we're not going take a hit in the stock market every time a company announces what everybody already knows — that the fist quarter sucked. And that would be a great thing. That's where we've been waiting to get for a while now, and today's non-sell-off is a pretty good indicator that we are finally there.

But the earnings drumbeat is far from over.

Sure. There are a lot of big ones coming this week, and for the next two weeks. (After the bell Tuesday, Intel actually topped estimates.) But I think we'll see a general sorting-out. Everyone knows the first quarter was lousy. The only thing that matters is the outlook for the rest of the year, relative to estimates. It's a given that they're down — it's a question of how much, and are there any surprises. And whether a company's problems — like Kodak, for instance— are deemed to be an individual problem or one that's industry- or economy-wide. So we'll see what develops.

So what's the outlook for spring in the markets?

The only real visibility is in the very short-term picture and the very long-term picture. I think, based on what we're seeing lately, it's safe for the next three months and safe for the next 10 years. The in-between is really impossible to call right now.

But in the short term, if you look at the numbers lately, there's been more volume on upticks than on downticks. Which means that people are on the sidelines with cash, and they're moving in when they see the stocks they like start to go up. I think we could see a rally that could last for the next two or three months. Unless the economy really slips into a recession, the worst seems to be over.

I think it's a good time for these markets. The tax selling is over — that's kept things down longer than I expected. People have already taken their lumps in terms of their portfolio. Now, for the next eight months, people can just be investors. Just sit back and take a reasonable look at things, and start to look at good companies again.