The DOW is only tangentially related to the economy---or did you miss the 1990s when the DOW was surging, but everyone here was claiming the economy sucked?
By the way, on both the DOW and the economy, they are 100% related, IMHO, to the Iraq situation, which is in turn related to the "War on Terror." Markets and consumers and suppliers are edgy about how all this will shake out.
I have great confidence that once Bagdhad is occupied, we will see a significant turnaround. It has taken FAR longer than I predicted (I'm wrong in that regard), because I thought we would already have turned Iraq into a giant used-car lot by now. But the economy is dependent on "animal spirits" that are driven by national security issues right now.