US markets took a needed pause Friday after a relentless 10-day run, marked by the Dow setting new records for eight straight sessions.
While expectations of a correction were common, most analysts continued to dismiss suggestions of a new bubble and said stocks could continue to climb as long as the Federal Reserve keeps in place its easy money policy.
Even new Treasury Secretary Jacob Lew, asked on the news channel CNBC if the markets were again overinflated, dismissed the idea. "The analysis that I've seen doesn't give me reason to be worried right now," he said.
Economic data continued to favor a stronger growth picture.
Official figures in the past week showed that consumption appeared to be holding up amid higher gasoline prices and higher tax deductions on paychecks, and in the face of spending cutbacks by the government.
That helped keep a footing under market sentiment, taking the Dow to its newest closing record Thursday, at 14,539.14, some 375 points beyond where the old 2007 high-mark stood before the market surge of the past two weeks.
The S&P 500 came within less than two points of its October 9, 2007 record on Thursday, but could not manage a new benchmark.
Overall for the week, the Dow Jones Industrial Average added 0.81 percent, ending at 14,514.11.
The broader S&P 500 gained 0.62 percent to 1,560.70, while the Nasdaq Composite crept up 0.14 percent to 3,249.07.
The Dow's record aside, the S&P's steady gains say more about the market's rebound, according to Peter Cardillo of Rockwell Global Capital.
"It indicates the broader market is now beginning to blossom out. It's not being confined to a list of 30 blue-chip stocks. So that means you have a greater participation of stocks moving in an upward direction."
Whether there is much more buying sentiment to keep powering the markets ahead is a matter of debate, however.
"The relentless march of the equity markets has raised concerns as to whether monetary policy is fueling another bubble. The rise, so far, appears to be in line with improving economic fundamentals, which may still be underestimated," said analysts at Wells Fargo Securities.
Cardillo dismissed the bubble description. "But we're probably reaching levels where the market needs to take a rest... So we could be in for a slight pullback until the latter part of April/May."
But Peter Cecchini of Cantor Fitzgerald was less confident.
"It's a very mixed picture. There are plenty of arguments on the fundamental side, globally, that lead me to believe that the US market is way overdone given the fundamentals of the rest of the world," he told AFP.
The slow speed of the rise has been a good sign, not outpacing too much the data on the economy and corporate profits, some analysts say. But they also note that it represents a caution that could easily turn to selling.
"The volumes are low, overall we haven't seen huge activity,' pointed out Steven Rosen at Societe Generale.
"I don't get the feeling that the market as a whole believe in this rally," he said.
The divergence of views has left traders eyeing every piece of economic data and, especially, every comment from members of the Federal Reserve, whose ultra-low interest rates and continued easy money policies underpin the boom.
That gives increasing importance too to the Federal Reserve's policy board meeting next Tuesday and Wednesday.
The last meeting showed increasing signs of nervousness among a handful of members of the Federal Open Market Committee over the risks in its stimulus efforts, particularly its open-ended, $85 billion a month bond purchases feeding liquidity into the economy.
Fed Chairman Ben Bernanke has steadfastly defended the current central bank policies over the past three months, arguing that the US economy remains fragile and unemployment too high to curtail monetary easing.
But any sign of more support in the FOMC for reeling in that program could push up interest rates and the dollar and take some wind out of stocks.
AFP
Fri Mar 15 2013
Who is Prabowo Subianto, incoming president of Indonesia?
A wealthy ex-general with ties to Indonesia's popular outgoing president and its dictatorial past, looks set to be its next leader.
Iran's supreme leader says Hamas leader's death will not halt 'Axis of Resistance'
The "Axis of Resistance", built up with years of Iranian support, includes Hamas, the Lebanese Hezbollah group, the Houthi movement in Yemen, and various Shi'ite groups in Iraq and Syria.
Putin says Russia willing to seek compromises between Iran and Israel
Russia is ready to help seek compromises between arch-foes Israel and Iran, President Vladimir Putin said on Friday, saying these would be difficult but possible.
What proposals will Russia push at the BRICS summit?
The proposal is also to establish a BRICS reinsurance company to allow uninterrupted shipment of goods and key commodities between members.
Indonesia's free meals plan in the spotlight as Prabowo readies for office
Prabowo calls the programme one of the main drivers of economic growth, eventually set to add an estimated 2.5 million jobs.
Astro AWANI's revamped English news website, AWANI International, launches on Oct 21
Astro AWANI's revamped English platform delivers in-depth global news and expert analysis to keep you informed on key developments.
Israeli strikes kill 33 people in Jabalia refugee camp in Gaza, medics say
Residents of Jabalia said Israeli tanks had reached the heart of the camp after pushing through suburbs and residential districts.
Liam Payne's ex-partner calls for media restraint after 'painful' death
Cheryl Tweedy used her statement to urge the media to remember they had a seven-year-old son, Bear, who could read the reports.
Analysts: Indonesia's strong MoF leadership team to boost investor confidence
Sri Mulyani Indrawati as head of Indonesia's Ministry of Finance is expected to instil confidence among investors.
Biden offers both a carrot and a stick to Israel as his term nears an end
Israel has frequently resisted US advice and has caused political difficulties for the Biden administration.
Putin says BRICS will generate most of global economic growth
Russian President Vladimir Putin will host a summit of the group in the city of Kazan on Oct. 22-24.
ISIS Malaysia's perspective of Budget 2025
An excellent rakyat-centric budget under the overarching principle of a caring and humane economy.
Budget 2025: Record increase in STR, SARA aid initiatives
The government will provide a significant boost to the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) initiatives next year.
Budget 2025: EPF contributions to be made mandatory for foreign workers – PM Anwar
The government plans to make it compulsory for all non-citizen workers to contribute to the Employees Provident Fund (EPF).
What policies to expect from Indonesia's new President Prabowo
Prabowo will be open to foreign investment, his aide has said, such as by offering investors management of airports and sea ports.
Budget 2025: Govt allocates RM470 mil to empower women's participation in PMKS
The Women's Leadership Apprenticeship Program will be intensified as an effort to produce more female corporate personalities.
Israel sends more troops into north Gaza, deepens raid
Residents of Jabalia in northern Gaza said Israeli tanks had reached the heart of the camp, using heavy air and ground fire.
Indonesia ramps up security ahead of Prabowo's inauguration
Prabowo Subianto will be sworn in as Indonesia's president on Sunday with Vice President-elect, Gibran Rakabuming Raka, also taking office.
Immediate allocation of RM150 mil for local authorities, DID to tackle flash floods
Datuk Seri Anwar Ibrahim said this allocation is intended to address the recent flash floods that hit the capital and several major towns.
Budget 2025: Sabah, Sarawak to continue receiving among highest allocations - PM
Sabah and Sarawak continues to be prioritised under Budget 2025, with allocations of RM6.7 billion and RM5.9 billion respectively.