Top of the News: Wall Street is taking Microsoft's earnings report as a sign of recovery in the tech sector. Maybe.

Profit fell in the fiscal first quarter but earnings beat expectations. Hopes are strong for sales of the new Windows 7, as well as the Xbox. The server and tools division saw growth. Still, the question going forward is whether Microsoft can beat the overall weakness in the general economy, and the tentative, weak nature of the recovery.

Consumers are still burdened by debt and many small- and mid-sized businesses are having trouble getting credit. These are some of the headwinds Microsoft will face. A stronger recovery in China, backed by China's more intelligently deployed stimulus, may help.

If Boeing chooses cheap over quality by starting a slow-walk to South Carolina, the Puget Sound region will rely more than ever on idea-based, talent-based work, as well as its international connections. So Microsoft and its spawn matter more than ever. Unfortunately there's no guarantee that the giant in Redmond won't cut jobs again to maintain the "cost discipline" that executives promised the Street.

The Back Story: Barry Ritholtz on the Big Picture offers this revealing chart on the Dow breaking the 10,000 barrier. "Its a meaningless number, without any impact technically or quantitatively. Its no surprise that the Dow did not hold over 10k for very long. Its been over 26 times, starting in 1999. And hear it is, 10 years later -- zero progress."

Former Labor Secretary Robert Reich answers the questions about why the Dow is up while the rest of the economy "is in the toilet": some corporate earnings are up (Amazon among them); bad unemployment numbers give investors confidence the Fed will keep interest rates at their historic lows and investors want to get in early and "ride the wave." He goes on, "Think Ponzi scheme. Nice for now, but watch out if you're one of the last in."

Bottom line: Wall Street is more disconnected from Main Street than ever.

Today's Econ Haiku:

Boeing, Boeing, gone
Hiking Appalachian Trail
Waving Stars and Bars