The bulls have been gunning for the Dow’s all-time high for several weeks, and on Tuesday, positive sentiment finally helped the oldest and best known of the major market averages close above a threshold that hadn’t been seen since Oct 2007.
Yes, it may be just a psychological barrier, but it’s one that gets plenty of attention. And today, in a rocky session, the Dow added another 42 points.
General themes that have been driving equities higher include:
· Slow but steady economic growth
· Profits are topping a low hurdle
· Quieter credit markets in Europe (more of a removal a roadblock)
· The search for yield
· A very accommodative Fed policy
· The renewed interest in LBOs and mergers
· A sense that China’s economy won’t stall
· Europe is expected to exit its recession later in the year
· The fiscal cliff was avoided at the beginning of the year.
Are there risks? You bet. Some include the possibility that European credit markets could flare-up again, China could experience a hard landing, or the U.S. recovery could stall.
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