Five and a half years after the start of a frightening drop that erased $11 trillion from stock portfolios and made investors despair of ever getting their money back, the Dow Jones industrial average has regained all the losses suffered during the Great Recession and reached a new high.
Good economic news helped lift the stocks.
Retail sales in the 17 European countries that use the euro rose faster than expected, China's government said it would support ambitious growth targets, and a report showed US service companies grew last month at their fastest pace in a year.
The blue-chip index rose 125.95 points on Tuesday and closed at 14,253.77, topping the previous record of 14,164.53 on October 9, 2007, by 89.24 points.
The record suggests that investors who did not panic and sell their stocks in the 2008-2009 financial crisis have fully recovered. Those who have reinvested dividends or added to their holdings have done even better. Since bottoming at 6,547.05 on March 9, 2009, the Dow has risen 7,706.72 points or 118 per cent.
The Dow record does not include the impact of inflation. Adjusted for that, the Dow would have to reach 15,502 to match its old record, according to JPMorgan Chase.
The Standard and Poor's 500, a broader index, closed at 1,539.79, 25.36 points from its record.
The last time the Dow hit a record, George W. Bush still had another year left as president, Apple had just sold its first iPhone, and Lehman Brothers was still in business. But unemployment was also 4.7 per cent versus 7.9 per cent today, a reminder that stock gains have proved no elixir for the economy.
Still, the Dow high is another sign that the nation is slowly healing after the worst recession since the 1930s. It comes as car sales are at a five-year high, home prices are rising, and US companies continue to report big profits.
The Dow record is a victory of sorts for Federal Reserve Chairman Ben Bernanke. Under his aegis, the Fed launched an unprecedented campaign to lift stocks by making their chief rival for investor money - bonds - less attractive.
Under a program called "quantitative easing," the Fed has bought trillions of dollars of bonds to drive their yields down. The idea was that the puny yields would so frustrate investors, they'd have no choice but to shift into stocks. That, in turn, would push up stocks and make people feel wealthier and more willing to spend, helping the economy.
Just as Bernanke had hoped, American household wealth, or assets minus liabilities, has risen, though the gains haven't been shared equally.
However, there were no signs of celebration on Wall Street after Tuesday's record-setting day. Like on any other day, after the closing bell traders rushed out the doors of the New York Stock Exchange and down the stairs of subway stations.
Adding to the chastened mood is lingering fear among many investors that stock gains can disappear in a flash. Burned by two stock-market crashes in less than a decade, Americans have sold more US stocks than they've bought the past four years, nearly unprecedented in a bull market since World War II.
In this run-up, nearly all the buying has come from companies repurchasing their own stock in an effort to boost its value. Companies in the S&P 500 have bought $1.5 trillion since the Great Recession began in December 2007.
The question now is: Can the stock rally continue? Investors need to pay attention to what's happening in the rest of the world.
Big US companies generate nearly half their revenue from overseas. The 17 European countries that use the euro as a currency have been in recession for more than a year.
Japan, the world's third-largest economy, fell into one late last year. Stock markets tend to look ahead, so what matters is whether the recessions deepen in Europe and Japan or those economies start growing again.
Another worry is what will happen after the Federal Reserve stops stimulating the US economy. Last month, minutes of the Fed's last policy meeting were released, and they showed members disagreeing on when to stop. The Dow lost 155 points in two days.