Rushing the Recovery: Today's Outrage

NEW YORK (TheStreet) -- I don't think folks were listening very closely to Ben Bernanke last week. The market heard only what it wanted to hear: The Fed chairman declared that the end of the recession could be near.

That's all it took to send the Dow soaring on Friday, led by shares of Caterpillar (CAT Quote) and United Technology (UTX Quote) (it didn't hurt that Caterpillar also announced a planned venture in China).

The S&P also jumped, with a curious mix of companies leading the way. The top three gainers Friday were testing and measuring equipment maker Agilent(A Quote), aluminum producer Alcoa(AA Quote) and iPhone inventor Apple (AAPL Quote). Microsoft (MSFT Quote) led the upswing on the Nasdaq.

All because Bernanke sounded somewhat optimistic.

Didn't anyone notice that Bernanke's words came pretty much verbatim from the official Fed statement issued the week before?

How about the overtly cautious caveats? Bernanke didn't say a return to growth was imminent. He said the prospects "appear good." He also said "strains persist," financial companies face more losses and consumers struggle to access credit.

Once again, the market is getting ahead of the consumer and rushing the recovery. This is a recipe for a swift and painful correction that could actually slow the economic rebound.

We had a shot across the bow two weeks ago, when the market tanked after reports of weak July retail sales and a drop in consumer sentiment reminded us that the economy is still struggling.

The market seems to have forgotten that lesson already. This investor amnesia shows just how badly everyone wants to recoup all the losses of the past year. But we need to be mindful of the consumer - since spending by the average American is what drives the U.S. economy.