The Economy? Er, Tune in After the Fireworks

Another set of indicators from the Commerce Department suggests the economy, as usual, is doing just what Alan Greenspan wants it to. According to figures released Friday, personal spending, the engine of the boom, rose just 0.2 percent in May — the same level as the revised April numbers. Personal income, the engine of personal spending, rose at a slower rate. And the report's implicit price deflator, one of the Fed head's favorite inflation indicators, was unchanged in May for the second straight month. If this keeps up, Greenspan could sit on his hands for the rest of the year.

So where's the rally? Well, it's a complicated day (half-day, really — the bell tolls at 1 for the holiday), the last day of the second quarter. Some fund managers are dressing up their portfolios with glamour stocks (which is why NASDAQ was on the rise), others are hurriedly dumping losers. The rest are out playing golf or beating the traffic to the Hamptons for the Fourth — it's not an easy scene to parse. But Dow investors without tee times, at least, were doing something quite logical as they pushed the index down Friday morning: They were worrying about earnings.

Yes, earnings — those silly numbers that didn't matter anymore in the dot-economy, matter again. This was a week in which more than 32 companies said they would fall short of Wall Street profit forecasts, and with the heart of earnings-announcement season just a few weeks away, the markets found themselves in a pessimistic mood. Investors now have the better part of four days to ask themselves the big questions: Will the news be as bad as we fear? Did Greenspan go too far, and kill our corporate good times? How do I keep my tan from peeling? Tune in after the fireworks.