“Greed is taking over from fear,” McMillan says.
It’s not clear whether stocks have become expensive yet or are just fairly priced. One measure of value, the ratio of stock prices to forecast earnings, is at 15 for S&P 500 companies. That is slightly below the 15-year average of 16.2, according to FactSet, a data provider.
Including this year’s gains, the S&P 500 is up 165 percent from the start of the current bull market in March 2009, 56 months ago.
Bull markets dating back to the Great Depression have averaged 57 months, according to S&P Capital IQ, a research firm, however the duration of bull markets has varied greatly over time. The bull market of the 1990s lasted 113 months, for instance.
Investors have been betting that Fed stimulus policies are not likely to change soon. Janet Yellen, the nominee to succeed Ben Bernanke as Fed chairman, indicated in congressional testimony last week that she was prepared to keep interest rates low to help the economy.
Investors were also encouraged by a Chinese government announcement late Friday that it plans to open state industries to greater competition and allow more foreign investment. Many big U.S. companies have come to rely on emerging markets like China to boost revenue. About half of the revenue in the S&P 500 comes outside the U.S.
The S&P 500 closed down 6.65 points, or 0.4 percent, at 1,791.53. The Dow rose 14.32 points, or 0.09 percent, to 15,976.02.
The Nasdaq composite fell 36.90 points, or 0.9 percent, to 3,949.07.
Among stocks making big moves, Boeing rose $2.28, or 1.7 percent, to $138.36, the biggest gain in the Dow. The plane maker booked $100 billion in orders at the opening of the Dubai Airshow.
Tyson Foods jumped 65 cents, or 2.3 percent, to $29.42. The food company said its net income surged 41 percent in the latest quarter on higher sales of beef and chicken. The company raised its dividend 50 percent.
The yield on the 10-year Treasury note fell to 2.67 percent from 2.71 percent.
AP Business Writers Steve Rothwell and Stan Choe contributed to this report.