First the Bureau of Economic Analysis (BEA) graph of Real GDP for the last few years:
 Again, the export growth and government stimulus at the beginning of 2008 are quite obvious.  The NBER (National Bureau of Economic Research) has the U.S. in recession beginning in December 2007.

Now WHY would the Stock Markets CHEER the news?!!?  Notice the clear "BOUNCE" (one month) we have recently been riding (the graph is a 1 year, Dow Jones Industrial Average):

 
The DJIA is almost back to the trading range, as it is often called, that we seemed to be "in" after the big revelations of September had their effect (the Investment Banks were insolvent and needed to be bailed out so were given money).

So why?

The market's view is that the worst has been seen.  Not that the economy is going to rebound, at least not until the 3rd or 4th quarter, but that the current retail sales, construction reports and the like are positive.  We still may have a couple more negative quarters, the analysts are saying, but we are seeing the effect of very low interest rates and the stimulus is still yet to come.  Remember that unemployment is a LAGGING indicator, meaning unemployment does not start to rise until after we are already IN the recession and continues AFTER the recession has begun to abate.

That's the "market's" view.  Another is that we were just terribly oversold - too much pessimism - and now the markets are back in a range more in line with our financial situation (companies, not the banks).  We Shall See, eh?