For the first half of 2010, almost two thirds of money managers are bullish, according to Barron's. In fact, 54% are bullish, and 5% are "very bullish." Responses suggest that the Dow Jones Industrial Average is expected to gain another 5% by the end of the year.

According to Barron's, "Today's bullish investors see the major stock indexes making steady progress through next June, amid signs the U.S. economy is on the mend after a searing recession."

Before the opening bell sounds on Thursday, October 29, Cincinnati-based Dow component Procter & Gamble (NYSE: PG) will report fiscal first-quarter earnings. Analysts believe P&G will report earnings of 99 cents per share with sales of $19.83 billion.

These expected results are lower than those of a year ago, when the company saw earnings of $1.03 per share and revenue of $22 billion. P&G set expectations low for this quarter, as it announced early in the quarter that sales are expected to fall again. Is this truly the case or is it a smart business move?

We've watched stock market numbers bounce around for two years. Unemployment stats have served as unpleasant reminders that, for some, leading indicators haven't translated to reality. We look for so many ways to understand the brutal economic environment with which we've had to contend, and all the choices can make your head spin. So, let's make it simple. Here are eight ways to tack a label onto the financial world in which we live.

1. Lost market value
Total stock market losses from October 2007's top to March 2009's bottom: $11.2 trillion
Total gains in the stock market since the bottom: $4.6 trillion
Lost ground: $6.6 trillion

2. Bad days
Percentage of the 10 worst days in history for the Dow Jones Industrial Average that happened in 2008, by point drops: 60%
Percentage of the 10 worst days in history for the DJIA that happened in 2008, by percentage drops: 30%

3. Mutual funds
Value of mutual fund assets at the end of 2007: $6.5 trillion
... and a year later: $3.7 million
Lost value: $2.8 trillion

But, it got a little better at the end of August 2009: $4.5 trillion (value of assets)

As Melly Alazraki noted earlier today, McDonald's Corp. (NYSE: MCD) is one of many heavy hitters to take the earnings stage today. Unfortunately, the fast-food firm didn't exactly impress with its latest quarterly figures; the company struggled under the weight of weak sales during the month of June, and saw its second-quarter profits slide 8% year-over-year as a result.

Specifically, the Big Mac parent raked in net income of $1.09 billion, or 98 cents per share, compared to its year-ago results of $1.19 billion, or $1.04 per share. Excluding a one-cent gain, earnings weighed in at 97 cents per share. McDonald's reported that strength in the U.S. dollar negatively impacted its quarterly results by about 9 cents per share.

When oil lost almost $3 a barrel, stock futures indicated a lower opening for today. Just shy of 5 AM, S&P 500, Down Jones, and Nasdaq 100 futures were all off 0.9%. The drop in oil to $64 a barrel has called into question any projections of a quick economic recovery -- as if high unemployment weren't enough. The Monday after any long weekend is hard, and this one's going to hurt.

The direction in which futures are pointing continues Thursday's equity declines in the United States, bringing the S&P 500 its third consecutive weekly loss. For the day, it lost 2.91%. The Dow Jones Industrial Average lost 2.63% of its value, with the Nasdaq Composite Index giving up 2.67%. Year-to-date, the DJIA is down 5.6%, the S&P 500 down 0.8%.

No one can deny the horror that was General Motors' (NYSE: GM) first quarter financial results . . . even if it did beat estimates. The automaker reported its eighth consecutive quarterly loss today -- this time in the amount of $6 billion. It also burned $10.2 billion in cash, its sales plunged 40% and it lost market share pretty much everywhere.

On that note, it's not surprising the guardians of the Dow Jones Industrial Average, The Wall Street Journal editors, despite trying to keep to a minimum any changes in the component stocks, are finally considering removing the lowest priced stock on the index.

John Prestbo, the editor and executive director of Dow Jones Indexes, said in an interview with Bloomberg Wednesday: "There are two choices for GM: bankruptcy or increased government ownership. Definitely the trend is in the direction that would force us to remove it."

Plenty of investors have been calling for General Motors Corporation (NYSE: GM) to be removed from the Dow Jones Industrial Average (DJIA) as the automaker hovers on the brink of bankruptcy. But, like it or not, GM's rock-bottom share price isn't justification enough to oust the stock. GM still represents a major chunk of our industrial economy.

However, GM's nationalization would more than justify its removal from the Dow. After all, that's why American International Group (NYSE: AIG) got the boot last fall -- once the government took a controlling stake in the insurance giant, Dow Jones wasted no time adjusting its blue-chip lineup.

Earlier this week, something a bit odd happened. With beleaguered General Electric shares (NYSE: GE) retreating sharply, the company's market cap has declined. As of Thursday morning, it's at $70.7 billion, placing it, for example, below Apple Inc. (NASDAQ: AAPL), with a market cap of $81.19 billion. That's right ... the venerable conglomerate, maker of aircraft engines, locomotives, and a host of other products, has been outsized by a personal computer company.

While this development may just be a blip on the radar of a very tumultuous time in the stock market, it signals a changing tide that began decades ago. GE is the last member standing of the original 12 members of the Dow. Founded in 1896, the average represented 12 of the most significant American companies. Here's what has happened to the rest of them:

The Dow Jones Industrial Average is in the headlines everyday, but few people actually understand how it's calculated. The DJIA is the sum of the value of one share of each of the 30 Dow components divided by the DJIA divisor, which is currently 0.1255527090. It's adjusted every now and then for spin-offs, dividends and splits. For geeks, the image at right shows the formula: p equals the price of the shares and d equals the DJIA divisor.

So what exactly is wrong with this formula? A ton. Critics have been pointing out forever that weighting the average based on stock price makes no sense because different companies have different numbers of shares outstanding. For example, if Berkshire Hathaway (NYSE: BRK.A) were part of the DJIA, its $70,000+ share price would dwarf the influence of all the other components combined. It would make much more sense to use a more holistic measure like market cap or enterprise value.

This post is part of a series featuring bargain stocks that are worth a look now. See more Cheap Stocks.

From a contrarian perspective, International Business Machines (NYSE: IBM) might seem like an odd choice. Large-cap tech stocks are heavily populated by hedge-fund investors, and securities with this dubious distinction have been absolutely hammered this year. However, there's a certain something about IBM that distinguishes it from the pack.

For starters, there's no cult following for IBM -- and cult favorites, such as Apple (NASDAQ: AAPL) and Research In Motion Limited (NASDAQ: RIMM), have performed significantly worse than IBM this year. The market's expectations for these beloved gadget-makers are perpetually running at peak levels, which makes them more vulnerable to a shift in investor sentiment. Conversely, when was the last time you heard someone really getting excited about IBM? In this market, "boring" can be a good thing.

In its mid-October earnings report, IBM edged past analysts' consensus third-quarter profit estimates by 3 cents per share. While sales of computer hardware slipped during the quarter, that weakness was more than offset by strength in software and services revenues. Big Blue also reassured the Street that its liquidity position was "very strong," a comment that carries more weight than ever before in the current environment.

Yesterday, the market had a swing of over 900 points as indexes hit new lows for the year and then pushed upward to close 6% or so higher. Overnight, markets in Asia and Europe staged rallies of their own.

The stock market may march up for a while, but that can't be sustained and the odds are likely that it will crash and make new lows again before year's end.

The fiction is that the markets trade based on what they see six months into the future. Perhaps they see GDP recovering by then. Not a chance.

George Soros said yesterday that there is some chance that the world economy will enter a depression next year. That may be extreme, but a majority of business leaders and economists who want to be heard on the subject say that this is the most significant downturn of their lifetimes.

There is a view that falling housing prices are at the core of the disaster that has overwhelmed the financial structure of the country and is now hurting everything from retail sales to tech company revenue. Housing may be helped by government programs, but if unemployment hits 8% or better next year, the number of people who have to give up their homes could rise sharply. Lower interest rates do not help people out of work.

Another misconception about the future is that oil prices will continue to fall. With some OPEC nation's facing budget deficits due to crude dropping from over $140 to $55, the cartel will have to cut production to meet demand. That may mean a huge cut, but OPEC can match the drop in the global need for oil with a paltry supply.

The stock market has not stopped going down.

Douglas A. McIntyre is an editor at 247wallst.com.

The epic battle between the stock market's bulls and bears continues. The Dow Thursday registered yet another difficult day, down 443 points to 8,695.79. It seems like just a couple days ago the Dow was above 9,600. No, wait, that was just a couple of days ago!

Don't be swayed by a mild market rally today: the Dow has declined about 10% in two days, and a mild rise could be merely short covering ahead of the weekend.

From a technical analysis standpoint the view is not pleasant as the Dow is well below its 50-day and 200-day moving averages. There's not enough buy side pressure to propel the Dow higher, but the Dow is still not oversold, with a relative strength index (rsi) of 42.

Further, the fundamentals picture does not look any better. Declining earnings and zero job growth -- the U.S. economy lost another 240,000 jobs in October after losing a revised 289,000 in September - are the main reasons yours truly has taken pains to underscore that if the Dow can hold 8,000 by the time 'normal' credit flows resume, that will be a moral victory.

Investors have become accustomed to bull markets -- long periods of stock price appreciation, i.e. a rising stock market. That's been the norm since the start of publicly-traded stocks in the United States, and certainly a feature of markets in the post-1980 period.

Provided that the U.S. economy is growing in a sustainable way and increasing its productive capacity, bear markets have been the exception, the momentary pull-back, when one takes a long view of the investment horizon.

The current bear market can be seen in that light, again, provided the nation's economy is on a sustainable growth track with an increasing productive capacity.

Still, the key in the above has been the U.S. economy (obviously). Absent a healthy economy, different Dow case studies pop up.

For example, what if the Dow didn't fall -- and didn't rise -- for seven years? In other words, a sideways Dow where no progress is made? It seems like a remote possibility, but that's exactly what occurred from early 1966, when the Dow fell below 1,000, until late 1972, when the Dow reclaimed the psychologically-significant 1,000 level.

Is it time to rein-in expectations regarding the Dow?

Indeed it is, if technical analysis and historical p/e ratios mean anything.

Those with visions of a Dow of 11,000 dancing inside their heads need to take a step back, for context and perspective, on the likelihood of a Dow push to that level in the near future.

The U.S. economy is in recession, it's shedding jobs, downward corporate earnings revisions are likely, and the world's major economic regions are attempting to re-liquefy credit markets and prevent a global financial crisis from further damaging economies, worldwide.

The above, as CNN Talk Show Host Larry King would say, 'ain't exactly signs of prosperity.'

And the Dow has responded: down more than 30% since hitting its all-time high above 14,000 a year ago.

Keep your eye on 8,500 / 8,200 / 8,000

Earlier in this space yours truly noted that the Dow had technical support at the 8,500 to 8,200 levels, and of course psychological support at 8,000.

With the nationalization of banks seemingly exceeding IPOs these days, to say that both developed and developing nations economic performance expectations are more-modest today than they were a year ago would be an understatement.

Still, investors would be wise to take a page from that playbook, as it relates to the Dow, and more broadly, to the U.S. stock market, so says economist Richard Felson.

Concentrating on the problem, not the inconvenience

Felson, who took pains to point out that he is not a market analyst or stock guru, nevertheless highlighted the importance of reining-in stock expectations: people who are 'looking for the market to rally,' or who look for a relatively quick turnaround in stocks in a quarter are missing the point.

"The purpose of the monetary and fiscal actions being taken is to maintain the financial system, so that there are stock markets, not to get the Dow to rise, or to create the next bull market," Felson said. "Investors need to keep sight of that fact." Today the Dow closed down 678 points to 8,579 and the S&P 500 was down 75 points to 909.