The Dow Jones Industrial Average powered to an all-time high, riding a resilient 2013 advance and putting devastating declines of the financial crisis in the rear-view mirror.
"It really does represent an achievement that we have climbed out of this crater," said Jack Ablin, chief investment officer at Chicago's BMO Private Bank, which manages about $66 billion.
The Dow rose 130 points, or 0.9%, to 14258 in midmorning trading, surpassing its earlier intraday high of 14198.10, set in October 2007. The benchmark has more than doubled from its March 2009 low of 6547.05 in the wake of the financial crisis. A close above 14164.53 would be its the highest finish ever.
The Standard & Poor's 500-stock index rose 14 points, or 0.9%, to 1539. The Nasdaq Composite Index added 35 points, or 1.1%, to 3217.
"The conversation has been: Are you being conservative enough in this high-risk investment world?" said Jim Paulsen, chief investment strategist at Wells Capital Management, which manages $332 billion. "And what it's changing to is: Are you being too conservative in this new bull market?"
Along with economic stabilization and the recovery in corporate profits, efforts by the Federal Reserve and other central banks to boost asset prices have also juiced stocks' rally. Bulls also argue equities remain cheap, relative to companies' earnings, and that low bond yields will force more investors to buy companies' shares.
Skeptics point to a slowing earnings outlook and potential tax and spending headwinds as lawmakers sort out the U.S.'s debt troubles.
Mark Otto, a Knight Capital Group director based on the floor of the New York Stock Exchange, said the excitement had been palpable there in 2007, when blue chips last traded at all-time highs. But now, he said, traders aren't as ebullient.
"There's definitely more caution in the air this time," he said. Still, "the momentum is to the upside."
On the economic front Tuesday, the nonmanufacturing sector expanded at a faster pace than a month earlier, bucking economists' forecasts for it to slow, according to the Institute for Supply Management's nonmanufacturing purchasing managers index for February.
"It's a good fundamental signal, on top of a good manufacturing reading that we had on Friday," said Doug Cote, chief market strategist at ING Investment Management, which oversees $179 billion in assets. "This market has really been hanging on central-bank stimulus from around the world, and it is encouraging to see some true fundamentals come out strong."
European markets were broadly higher, with the Stoxx Europe 600 up 1.7%. Euro-zone retail sales rose more than expected in January, according to Eurostat. Markit's February composite purchasing managers index for the region was revised higher.
Asian markets bounced from the previous session's sharp declines. China's Shanghai Composite, which tumbled 3.7% on Monday after the introduction of new measures to cool the country's property market, climbed 2.3%. Outgoing Premier Wen Jiabao helped reassure investors as he kicked off the annual session of the National People's Congress by announcing an economic growth target of 7.5% for 2013, as expected.
Elsewhere, Australia's S&P ASX 200 gained 1.3% after stronger-than-expected retail-sales data and Japan's Nikkei Stock Average added 0.3% to close at a fresh 4�-year high.
Front-month April crude-oil futures added 0.3% to $90.43 a barrel, while March gold futures advanced 0.5% to $1,580.30 an ounce. The dollar eased slightly against both the euro and the yen.
J.C. Penney was the biggest decliner among S&P 500 components, after reports that commercial landlord Vornado Realty Trust looked to sell 10 million shares, or more than 40% of its holdings in the department-store chain.
Ascena Retail Group climbed after the operator of Dressbarn, Justice and Maurices stores reported a smaller-than-expected decline in earnings.
Qualcomm gained after the semiconductor maker raised its dividend by 40% and announced a $5 billion stock repurchase program.
Impax Laboratories slid after saying Food and Drug Administration inspectors have found continuing problems at its Hayward, Calif., manufacturing facility that may affect new and pending drug applications.
Santarus surged after the biopharmaceutical company reported fourth-quarter earnings and revenue that topped analyst expectations and affirmed its 2013 outlook.
Williams Partners fell after the natural-gas transportation company announced an equity sale.
—Alexandra Scaggs contributed to this article.Write to Matt Jarzemsky at matthew.jarzemsky@dowjones.com
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