On Wall Street, it paid to wear rose-colored glasses in the third quarter.
Another surge in stock prices rewarded investors who kept faith that the recession was ending -- even amid growing concern about the recovery's dependence on government support.
The Dow Jones industrial average, which slipped 29.92 points, or 0.3%, to 9,712.28 on Wednesday, jumped 1,265 points, or 15%, for the quarter overall. That followed an 11% advance in the second quarter, as the market continued to emerge from its worst decline since the 1930s.
Cash also poured into other investments, including corporate bonds, municipal bonds and gold, as more people fled short-term accounts that now pay barely detectable yields thanks to the Federal Reserve's policy of holding its benchmark interest rate near zero.
"If I'm a risk-averse saver I can earn nothing," said Howard Simons, a strategist at Bianco Research in Chicago. That has forced large and small investors alike to put aside their doubts and, in effect, vote for an economic rebound by shoveling cash back to Wall Street.
The rally in stocks and bonds, in turn, has helped to support recovery hopes by restoring a large chunk of the paper wealth lost in the financial markets' meltdown from September 2008 to March.
The U.S. stock market's value Wednesday was $12.6 trillion as measured by the Wilshire 5,000 stock index, a gain of $4.9 trillion since share prices hit 12-year lows in early March.
Market bulls say investors responded logically to a slew of economic reports in July, August and September that suggested that business activity was beginning to turn up -- or at least that it was weakening at a slower pace.
Better-than-expected second-quarter earnings reports also helped to push stocks higher, even though the positive surprises in many companies' results stemmed from cost cutting rather than from stronger sales.
As buyers continued to flock into the market, they powered a broad-based advance that looked a lot like the second-quarter rally:
* The benchmark Standard & Poor's 500 index, which closed Wednesday at 1,057.08, was up 15% in the third quarter after rising 15.2% in the second.
* The technology-heavy Nasdaq composite index gained 15.7% in the latest quarter, to 2,122.42, after a 20% surge in the previous quarter.
* Small-company stocks continued to outpace blue chips, as usually happens in the early stages of a bull market. The Russell 2,000 small-stock index climbed 18.9% in the third quarter after rising 20.2% in the second.
* Financial stocks were the best performers among the 10 broad industry groups in the S&P 500 last quarter, after also leading the way in the second quarter. The financial sector jumped 25.1% in the latest period after a 35.1% surge in the second quarter.
Big third-quarter percentage gains in shares of federally bailed out companies -- including Fannie Mae, Freddie Mac and American International Group -- paced the financial sector's advance. But that also triggered scorn from skeptics who said the wild action in the stocks -- which may have little or no value in the long run, depending on the government's decisions about the companies -- was a sign the rally had degenerated into reckless speculation.
Market optimists say the doubters refuse to acknowledge the bigger picture of an improving economy.
"The economy has just exited recession, and the stock market rally is not likely to end this early in a fresh recovery," said Jim Paulsen, investment strategist at Wells Capital Management in Minneapolis.
Yet some of the economic data reported in recent days have raised new questions about the sustainability of any recovery. Durable goods orders, for example, fell 2.4% in August, a bigger-than-expected decline. And a report Wednesday showed that Chicago-area manufacturing activity weakened in September after climbing in the previous three months.
Reports on consumer confidence in September were at odds, with one national survey posting an increase and another showing a decline.
Bob Doll, global chief investment officer of money management giant BlackRock Inc. in New York, said investors should expect that economic reports will be mixed.
"Recoveries are always uneven," he said. Though he warns that stocks are vulnerable to a short-term pullback, "we believe the path of least resistance continues to be up."
Stocks haven't lost much ground despite the latest concerns about the economy. Nor have rising tensions between Iran and the West had much effect on investors' collective mood. The Dow is off just 1.2% from its 2009 high of 9,829.87 reached Sept. 22.
Many bulls are counting on third-quarter earnings reports to reenergize the market. A recent uptick in corporate merger activity also has underpinned optimism about further gains in share prices.
Still, Wall Street is haunted by concern about the extent of the government's involvement in the economy, including fiscal-stimulus measures and the Federal Reserve's massive injections of cash into the financial system.