The Dow Jones Industrial Average soared to a record closing high on Tuesday, breaking through levels last seen in 2007 and as investors rushed in to join the party in anticipation of more gains.
Signs of a strengthening U.S. economy, continued support from the Federal Reserve, and fairly attractive valuations compared to other assets have boosted the Dow by almost 9 percent so far this year. A strong reading in the U.S. services sector, which accounts for the bulk of economic activity, was the latest indicator of improving demand.
"I'm surprised at the speed of the gains, which have come at a pace that we can't annualize. But stocks are still not expensive, and we can expect to continue getting a reasonable advance from here," said Jim McDonald, chief investment strategist at Chicago-based Northern Trust Global Investments, who helps oversee $760 billion in assets.