The US stock market hit new intraday heights yesterday, with the benchmark S&P 500 index surpassing the 1,800 level as investors bet that the era of easy monetary policy would last a few months longer.
The milestone came as the technology heavy Nasdaq Composite approached 4,000, a level it last touched during the dotcom bubble 13 years ago, and the Dow Jones Industrial Average reached 16,000.
Equity benchmarks have charged higher after Janet Yellen, the nominee to be chair of the US Federal Reserve, dropped no hint of an imminent slowdown in monetary stimulus at a confirmation hearing last week. There was no evidence of a financial bubble, she told Congress. The market’s surge sets up a 2014 test of whether the real economy can accelerate sufficiently to support stocks when the Fed eventually slows its $85bn monthly asset purchases.