Melt Up-date

clipped from www.businessweek.com The U.S. economy is coping with alarmingly high double-digit unemployment, a widening commercial real estate bust, and over-indebted consumers. Few think the economic recovery now under way will be a spectacular one in 2010. So why has the stock market surprised skeptics by powering higher in recent weeks? One explanation being bandied about by equity strategists and portfolio managers is that the stock market may be in the midst of a momentum-driven trading phenomenon known as a "melt up" that has precious little to do with economic fundamentals. A handful of big institutional investors and hedge funds, rather than retail investors, have been responsible for the lion's share of buying this year. In fact, overall there is far greater investor enthusiasm for asset classes other than U.S. equities. Emerging markets, which have outperformed their American counterpart, are being deluged with fresh money.