Traders celebrate on the floor New York Stock Exchange on Tuesday, the day… (Emmanuel Dunand / AFP/Getty…)
NEW YORK -- The benchmark Standard & Poor's 500 index burst through a half-decade-old record as stocks continued their strong rally.
The broad S&P index is on track to finish the day above its all-time closing high of 1,565.15 recorded Oct. 9, 2007. The S&P crossed the milestone just days after the Dow Jones industrial average did the same thing Tuesday, March 5.
The two widely followed U.S. stock indexes reached their 2007 highs just weeks before the official start of the deepest recession in decades and about a year before the worst of the global financial crisis.
Since hitting bottom at 676.53; in March 2009, the S&P 500 has gained more than 130%.
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The run-up in stock prices has been fueled by a drumbeat of reports showing the U.S. economy is recovering, albeit at a sluggish pace. And investors have concluded that the financial markets aren't immediately threatened by a debt crisis and recession in Europe or by fiscal dysfunction in Washington.
The market rally gained steam near the start of this year after President Obama and Congress were able to defuse much of the "fiscal cliff's automatic tax hikes. Although spending cuts from the budget "sequester" have begun going into effect, investors have seemed to shrug at them.
A major driver of the stock market in recent years has been multiple rounds of stimulus by the Federal Reserve and other central banks around the globe. The Fed has pumped billions into the economy, keeping interest rates near record lows. That in turn has made traditionally safe investments like bonds less attractive, pushing investors into riskier assets such as stocks.
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