What’s holding up the stock market? (It’s not the economy.)

With a close over 10,220 on Monday, the Dow Jones had its best showing of 2009. Like the day a few weeks earlier when it broke the five-figure mark for the first time since October 2008, the market’s achievement was greeted not by champagne and celebration, but by introspection among economists and investors. Can this rally be trusted? Is it a real rebound or something else? Are we witnessing the growth of a new bubble or a zombie market propped up by outside forces?

By the math of some skeptics, the Dow’s 10,000 is only “worth” about three-quarters of that anyway, owing to the ground the U.S. dollar has lost in comparison with other currencies since the index first hit five digits. Even taking the current number at face value, though, the sheer speed of the recovery should give us pause.

While the recession’s been declared officially over, this recovery is not going to be V-shaped. It’s going to take time, given the enormity of the financial crisis that precipitated it. The Dow gained more than 53 percent from its March trough, while the S&P is up over 61 percent from its springtime low. That’s just not normal; it’s too much, too soon. Yes, the economy bounced back strongly from the 1981-82 recession, but that was because the Federal Reserve lowered interest rates by more than 10 percentage points over the course of roughly a year. That arrow’s already been shot this time around.

Take a look at other metrics unrelated to the movement of the equities market and more red flags pop up. Many of the positive or less-negative returns corporations have been delivering of late come from aggressive cost-cutting. Obviously, this tactic has a limited shelf life. Similarly, gains in productivity are a double-edged sword because they contribute to lower rehiring rates even after demand increases.

Unemployment and foreclosure rates are still rising, consumer and commercial borrowing remain restricted, and small businesses are getting hammered. Noted analyst Meredith Whitney wrote in the Wall Street Journal last month that these companies "have never had a harder time" securing financing. This latter point doesn’t seem to be factored in to the market recovery. Small businesses, although they contribute roughly half the country’s jobs, aren’t represented by the Dow Jones. Their pain isn’t reflected in the index, especially the large-cap benchmarks that so many use as a proxy for the broader economy. A look at the Russell 2000, one index that does focus on smaller companies, shows that the little guys haven’t shared in the kind of recovery their larger brethren are experiencing.

What’s holding this balloon aloft? Some attribute the rapid rise to investor euphoria at the realization that this recession hasn’t spiraled into a full-blown depression. The Federal Reserve’s continued stance of aggressively low interest rates gets partial credit. With rates so low, institutional investors that would otherwise stick to safer havens are entering the stock market just to eke out their required returns. This demand inflates prices. Low rates also play a role in that many of the stocks that have led the recent rebound are financial stocks, which benefit directly from being able to borrow money at bargain-basement rates. Just four stocks—Bank of America (BAC), Citigroup (C), Fannie Mae (FNM), and Freddie Mac (FRE), all of which rely on the Fed’s largesse to an outsized degree—are responsible for up to 20 percent of all trades.