NEW YORK (USTODAY) - In the latest sign that stocks continue to heal from their near-death experience during the 2008-09 financial crisis, the U.S. stock market achieved another post-crisis milestone Thursday, topping its prior bull market high it notched in April and climbing to a fresh 4 ½ year high.
Stocks were powered higher by a powerful one-two punch of better U.S. economic news and the announcement of a bond-buying program by the European Central Bank designed to lower borrowing rates in troubled eurozone countries and stabilize Europe's wobbly finances.
The Standard & Poor's 500 closed up nearly 29 points, or 2%, to 1432, eclipsing its prior cycle high of 1419.04 it notched on April 2. The benchmark index, which is home to America's largest companies and represents roughly 70% of the stock market's total value, is now trading at levels last seen in January 2008.
The S&P 500 is now trading at its highest level since Barack Obama became president on Jan. 20, 2009.
Also hitting a new 2012 peak was the Dow Jones industrial average. The blue chip gauge gained 244 points to 13,292, topping its May 1 high of 13,279.32 and rising to levels last seen in December 2007.
The technology-packed Nasdaq composite also hit a fresh bull market high, closing out at 3136, and taking out its March 2012 high. The Nasdaq is trading at its highest level since November 2000.
Dow Jones industrial average, five trading days
Perhaps the greatest significance to the market's continuing comeback is that it shows its resilience, says Mark Luschini, chief investment strategist at Janney Montgomery Scott.
Taking out the old 2012 highs will provide a psychological boost, he adds.
"It's evidence that the recovery in the economy, which many investors don't think has occurred fully, is real and stocks reflect it," Luschini says.
"It might also spark an interest from investors that have been wary of stocks. Hitting a post-crisis high is a tangible demonstration that the market is resilient, that it came back, that investments recover even from brutal declines, and that a patient investor can make money in stocks."
The S&P 500, of course, is still chasing its October 2007 all-time closing high of 1565.15. So is the Dow, which remains nearly 900 points below its record high of 14,164.53.
Still, analysts say the market has a lot to prove if investors, who have lived through the technology-stock bust of 2000 and the Great Recession of 2008-09, are to truly believe in the rally.
"For the rally to be sustainable," says Rex Macey, chief investment officer at Wilmington Trust, "we need to get more good information, data and news."
Todd Salamone, director of research at Schaeffer's Investment Research, however, says there are some key reasons stocks can continue to push higher.
Many professional investors, he says, have either been betting against the market or are trailing their performance benchmarks, and may have to jump in the market in an effort to chase performance. The bullish combination of the Federal Reserve and ECB supporting markets, coupled with better economic data, may also push investors into stocks.
"It's all about liquidity and there is certainly enough liquidity on the sidelines to fuel a rally," says Salamone.