Passing another milestone on the nation's long journey back from the Great Recession, the Standard and Poor's 500 index closed above 1,500 for the first time in more than five years Friday after a wave of good earnings reports.
It took scores of incremental gains, several stalled rallies and a few sickening falls, but the widely watched S&P, one of the broadest measures of the American stock market, finished at 1,502.96, up 8.14 points. The index had not closed above 1,500 since December 2007, the start of the worst economic downturn since the 1930s.
The news came on top of other hopeful signs that the economy is slowly recovering. Housing is rebounding. Companies are hiring again, albeit slowly, and their earnings, a big driver of stock prices, are at record levels.
"The bottom line is that corporate America is doing exceptionally well," said Joe Tanious, a global market strategist at JPMorgan.
The breakthrough happened on an eighth straight daily gain for stocks, itself a remarkable performance. That is the longest winning streak since November 2004.
Stocks have surged this month, with the S&P advancing 5.4 percent. It jumped at the start of the year when lawmakers reached a last-minute deal to avoid the "fiscal cliff." Signs that Europe has avoided financial collapse also helped.
Stocks fell sharply during the Great Recession. By March 2009, the S&P was 57 percent below its October 2007 peak, a harrowing plunge that scarred a generation of small investors and, some Wall Street experts believe, will keep them away from stocks for years to come.
Since that fall, the market has climbed sharply, though it has endured several big declines. In May 2010, a trading glitch set off a so-called flash crash that sent stocks plummeting. And in August 2011, stocks gyrated like a roller coaster for several days as fears mounted that the U.S. would default on its debts.
On Friday, stocks were helped by earnings from two big companies. Procter & Gamble, the world's largest consumer products maker, rose $2.83 to $73.25 after reporting that its quarterly income more than doubled. P&G also raised its profit forecast for its full fiscal year. Starbucks climbed $2.24 to $56.81 after reporting a 13 percent increase in profits.
The Dow Jones industrial average closed at 13,895.98, up 70.65 points. The Dow is up 6 percent on the year.
The Nasdaq composite gained 19.33 points to 3,149.71.
The Dow is now just 268 points below its record high of 14,165, reached on Oct. 9, 2007, two month before the recession began. The Dow has more than doubled since its recession low of 6,547 on March 9, 2009.
The S&P 500 is 62 points shy of its record of 1,565, reached on the same day the Dow hit its peak. The S&P has also more than doubled from its low of 676, which happened on the same day the Dow bottomed out in 2009.
JPMorgan's Tanious expects stocks to go even higher. He says corporate earnings should grow at about 5 percent over the next year or two, and stock valuations will rise. Currently, the S&P 500 is trading at an average price-to-earnings ratio of 14, below an average of 15.1 for the last decade, according to FactSet data.
On Friday, Apple continued to decline, allowing Exxon Mobil to once again surpass the electronics giant as the world's most valuable publicly traded company. Apple fell 2.4 percent to $439.88, following a 12 percent drop on Thursday, the biggest one-day percentage decline for the company since 2008, after Apple forecast slower sales. The stock is now 37 percent below the record high of $702.10 it reached Sept. 19.
Apple first surpassed Exxon in market value in the summer of 2011, grabbing a title Exxon had held since 2005. The two traded places through that fall, until Apple surpassed Exxon in early 2012.
Not everyone on Wall Street thought the S&P milestone was worth celebrating. Some noted the stock market is more a reflection of how traders feel than a reflection of underlying fundamentals.
"It's not a landmark that we really follow or that we really care about," said Derrick Irwin, portfolio manager for Wells Fargo Advantage Funds. "Focusing on the benchmarks can end up shooting you in the foot, as we've seen."
Some of the rise may also be due to investing stock market momentum. A rule of thumb is that when a stock price or an overall index gets tantalizingly close to a milestone, as the S&P has been for days now, it's almost certain to cross that milestone, at least temporarily.
"Sure, it's a good thing," said Christian Bertelsen, chief investment officer of Global Financial Private Capital in Sarasota, Fla. "But I wouldn't read too much into it."
Still, Deutsche Bank analysts raised their year-end target for the index to 1,600 from 1,575.
Companies will be able to maintain their earnings even if lawmakers in Washington decide to implement wide-ranging spending cuts to narrow the budget deficit, the analysts said in a note sent to clients late Thursday.
The yield on the 10-year Treasury note, which moves inversely to its price, climbed 11 basis points to 1.95 percent.
Among other stocks making big moves.
— Halliburton gained $1.91 to $39.72 after posting a loss that was smaller than analysts had expected. The oilfield-services company said fourth-quarter profits declined 26 percent to $669 million on increasing pricing pressure in the North American market and one-time charges from the Deepwater Horizon disaster. Wall Street had expected worse.
— Hasbro fell $1.14 to $37.31 after the toy maker said its fourth-quarter revenue failed to meet expectations because of poor demand over the holidays. The company plans to cut about 10 percent of its workforce and consolidate facilities to cut expenses.
— Green Mountain Coffee Roasters rose $2.53 to $46.31 after an analyst noted that sales of a competing coffee brewer introduced by Starbucks were getting off to a weak start.