There are times when stocks move higher for no particular reason or vice versa. It is enough to make a Rational Investor irrational. At a minimum such a state means the market is far from efficient.

Yesterday, one of my Top 10 Stocks to Avoid in 2009, 3M Company (MMM) reported lower earnings reduced expectations moving forward.

On a day when the market was substantially lower, one could reasonably expect that MMM would trade lower in tandem. In fact, you could argue that MMM would do worse than the market given the poor results.

Instead the stock moved higher. Does that make any sense?

MMM is a business in decline in a contracting global economy. With earnings falling, valuation should be dropping as well. Because of future uncertainty the drop in valuation should be fairly significant.

Nobody knows where all of this is going. You want to own the stock that is running smoothly and efficiently especially in this market environment.

MMM’s fourth quarter profits fell by 37%. In the period the company made 97 cents per share excluding certain items. Analysts were expecting 93 cents.

The problem for the company is forward guidance. MMM cut its forecast for earnings in 2009 to a range of $4.30 to $4.70. Currently analysts have the range at $4.50 to $4.95.

It took a day, but with analysts now cutting their forecast for 2009, MMM stock is down more than $2 per share. We are back to where we were before the announcement.

Again, this action makes no sense. For starters I would not pay more than 5 times the now reduced forecast. That translates to a price per share in the low $20 range. The stock would have to get a lot cheaper for me to be interested.

The reason for the low multiple is the risk that earnings will be even lower than now anticipated. The economy is going nowhere in a hurry and it looks to be getting worse, not better.

This article was written by Jamie Dlugosch, contributor to InvestorPlace.com. For more actionable insight like this, go to: www.InvestorPlace.com.