Markets Pass Another Milestone, as Investors Remain Fearless

“It comes down to psychology, and the psychology today is that everything is awesome,” said Charlie Bilello, a stock market historian at Pension Partners. “Jobs have grown for 85 straight months, you have growth in corporate earnings, and you have tax cuts.”

This week’s rally was sparked by a smattering of good news. Strong economic signals showed consumer confidence at a nearly 17-year high. Retailers posted promising results as the holiday shopping season kicked into gear. And it wasn’t just the Dow. The Standard & Poor’s 500 was up 0.82 percent on Thursday and closed at 2,647.58. The Nasdaq composite finished up 0.80 percent.

More than anything, enthusiasm about life being more pleasant for corporate America is propelling stocks. This week, investors were thrilled by the signs that a normally dysfunctional Washington is coalescing around a tax-cut package that would go straight to the bottom line of businesses and their owners.

Of course, there is no guarantee the tax-cut package will become law. That is a potential tripwire for markets.

“If the tax reform doesn’t get done, I think there will be a pretty sharp correction,” said Bruce Van Saun, chief executive of Citizens Financial Group, one of the largest banking companies in the northeastern United States.

Mr. Van Saun said stock markets could plunge as much as 15 percent if the tax cut was derailed in Congress. “I think it’s quite pivotal right now,” he said. “The businessperson has an expectation that this will get done.”

In a year of stock market records, hitting the 24,000 mark is not the most historic. This was the fifth 1,000-point milestone for the Dow this year; it first hit 20,000 on Jan. 25. The latest large round number — surpassed after the Dow jumped 1.3 percent Thursday — arrived barely a month after the previous landmark.

These milestones, of course, are arbitrary. Passing a round number in a particular index isn’t itself significant.

But the ease with which the barrier was cleared highlights the extent to which investors are willing to look past geopolitical uncertainty and pricey stock valuations and bet that the market will keep going up.

The S. & P. 500 Index


“People are assuming this is normal — but it is not,” Mr. Bilello said. “The relationship between risk and…

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