Today's Outrage: Fickle Investors Jeer & Cheer Job Losses

Today we'll see just how fickle investors are about job losses.

On Monday, we saw investors reward American Express(AXP) for slashing jobs. AmEx shares surged 7.8% that day.

HP(HPQ) said Tuesday that it would cut 2% of its workforce and the company's shares jumped 2.4%.

Today, however, the overall market is poised to open lower because of the unemployment report showing new jobless claims jumped by 637,000.

Nevermind that included inside that data are the job cuts that were cheered at companies from banks such as Bank of America(BAC) and Citigroup(C) to technology companies such as Microsoft(MSFT) and Apple(AAPL) to retailers like Abercrombie & Fitch(ANF) as well as manufacturers like General Electric(GE).

Yes, investors want to have it both ways. They want to see individual companies doing whatever it takes to shore up the bottom line and increase the return on investment. At the same time, investors hate to see signs that the overall economy is suffering.

Intrinsically, investors know that job losses are never a good solution. A company that is focused on saving its way to higher profitability is not a growth stock.

For companies, pink slips are the easy way out. It's much easier and quicker to cut the headcount than to tackle other more entrenched efficiency problems.

This is the vicious cycle that we are in. Companies cut jobs to save themselves, hurting the overall economy -- and ultimately themselves -- in the process. All the unemployed folks stop spending, causing other companies to scale back investments and slowing the economy further. It trickles down from big companies to their suppliers. It moves horizontally across the economy from consumer-focused companies to wholesalers to manufacturers.