The Dow Jones Industrial Average closed at a record high on Tuesday, surging more than 126 points to close at 14,253.80, its highest level since October 2007.
The S&P 500 Index also gained 14.59 points to close at 1,539.79, only 2.3 per cent lower than its October 2007 high of 1,576.09.
The gains came as investors poured money into blue-chip stocks as the US economy shows signs of improvement. Walt Disney Co and 3M were some of the Dow stocks that hit all-time highs on Tuesday.
The Dow has gained nearly nine per cent so far this year, and by around 120 per cent since it bottomed out in March 2009.
Analysts told Reuters that attractive valuations and increased liquidity in the market are the main factors fueling the rise.
“Just because we’re testing old highs doesn’t necessarily mean the markets are going to capitulate. The underlying fundamentals still remain in place,” Joseph Tanious, global market strategist at JP Morgan Funds in New York told the agency.
“It’s been a bumpy ride, obviously, the past few years, but it appears corporate America has proved its resilience once again,” he added.
“People are now starting to realise that it is a bull market,” Laszlo Birinyi, president of Birinyi Associates told Bloomberg Radio.
“It’s not going to come back, you’ve missed the train, and the train still has a long way to go. But you better get on it.”