Wall Street has moved within range of a new milestone of 12,000 for the Dow Jones blue chip index as investors grow more confident about a "soft landing" for the US economy and healthy corporate earnings.
But despite the upbeat sentiment among investors, some analysts say the market may need to pause or pull back in the short term to digest the strong gains of recent weeks, and will take a cue from corporate results.
In the week to Friday, the Dow Jones Industrial Average of 30 blue-chip stocks climbed 0.93 percent to end the week at a new all-time record of 11,960.51.
The broad-market Standard & Poor's 500 increased 1.18 percent on the week to 1,365.62 and the NASDAQ composite advanced 2.49 percent to 2,357.29.
Over the past week, the market was focused on third-quarter corporate results but managed to shrug off a disappointing set of results from aluminum giant Alcoa.
Alcoa's results were "bad news, but we knew that in the materials sector, there was a slowdown," Marc Pado at Cantor Fitzgerald said.
Hugh Johnson at Johnson Illington Advisors, said earnings will be another important focus for investors in the coming week but that the overall trend is positive.
"They're good so far," he said, noting that "74 percent of the companies of the S&P 500 that have already reported exceeded estimates."
"The numbers that came out continue to point to pretty steady growth," Johnson added.
A further drop in energy prices added to the cheer on Wall Street, with New York crude oil futures trading as low as US$57.22 -- marking its lowest point since Dec. 19 last year, and a 27-percent drop from its record high of US$78.40 in mid-July.
A good deal of the focus has been on the records set on Wall Street with the Dow hitting a series of records in the past two weeks after a six-year struggle to recover from the dot-com collapse.
* Dow Jones: up 0.93 percent to new all-time record of 11,960.51.
* Standard & Poor's 500: up 1.18 percent to 1,365.62.
* NASDAQ: up 2.49 percent to 2,357.29.
"While crossing a 1,000 point threshold on that index is not a huge event from an economic perspective, it is an excellent barometer of investors' overall mood," said Fred Dickson, market strategist at DA Davidson.
"We have often said that the Dow is perhaps the most widespread barometer of the mood of the country encompassing factors that extend well beyond corporate America's earnings reports," he said.
Dickson said the rally "has placed enormous pressure on under-invested portfolio managers and individual investors to step up to the plate and hop on board what appears to be an important train moving rapidly out of the station."
But he and others said the market cannot continue to move straight up.
"While we remain positive toward the near-term prospects of the stock market, we remain well aware that even hard charging bull markets must pause occasionally to take necessary `relief' breaks," he said.
Al Goldman at AG Edwards said he remains concerned that "the uncertainty represented by the Nov. 7 midterm elections has yet to be discounted."
"If we get a normal pullback the odds on a year-end rally will increase. Our long-term opinion remains cautiously optimistic," he added.
Investors will focus in the coming week on results from Johnson and Johnson, Yahoo, General Motors, Apple, eBay, Intel, Google and Coca-Cola, among others. Economic reports include surveys on inflation and industrial production.
Bonds fell in the past week as money shifted into stocks. The yield on the 10-year Treasury bond rose to 4.806 percent from 4.696 percent a week earlier, while that on the 30-year bond increased to 4.938 percent from 4.837 percent.