The stock market is a very good reflection of the actual economy. When the stock market is doing poorly this usually indicates that the economy is doing poorly as well. Sometimes there is a delay and the stock market will be doing good and the economy is not. However, this is a very slight delay.
The stock market numbers definitely reflect the economy, as we can see, if looking past current events, from the Great Depression/stock market crash. People are unwilling to take a risk in investing in companies when they aren't sure if consumers are going to be willing to purchase the products. Because of that, stock values go down. As the economy recovers, the stock market should follow suit, and if the economy worsens, stock values will go down.
The stock market is a good indicator for the state of the economy. Not necessarily the health. There's a BIG difference between the two.
Lemme give an example. In the early '80s, Japanese stock markets skyrocketed, signifying that the Japanese economy was thriving. What it couldn't show was that Japan was using an inferior interest-loan system that made it lose money in the long run by giving out money at really low interest and funding bad loans. And so, the stock market crashed in the early '90s, and Japan's growth was stunted forever. Their stocks did say that the state of the economy in the '80s was great, but their health was deteriorating.
Now, don't get me wrong: stocks do tell if the economy is doing good or not. But they can be inflated prematurely or manipulated by companies, such as Chinese manipulation of stock prices and shares to show that they're doing better when in reality they're not doing as good. Then we have things like bubbles, which are a REAL NUISANCE to investors when they hit.
So, the actual numbers will tell you the state of its economy (considering that those numbers are from a capitalistic economy where most of the population invests), but not necessarily its health.
The raise and fall of stock market numbers reflects only the stock market the numbers are derived from. Although a particular market might be effected by the same events as the 'real' market (tsunamis, depressions, war etc.), the numbers do not represent the health of the 'real' market. Monopolies, over reliance on government subsidies, and illegal practices hurt the 'real' market but do not necessarily impact the stock market numbers.
If anything the market numbers are a reflection of what politicians are doing and saying about bills. The economy could actually right itself if the White House and congress would stop suggesting and then passing more QE from the 'Fed'. The market is a direct reflection of those QE 2-5 bills being passed which lower the value of the American dollar because it's not backed by anything except a social security number. If people could see beyond their nose they would see that in other places, China specifically, where the economy may not be doing well their market is still thriving.