Wall Street had another banner day Friday with all the major indexes trading higher and the Dow Jones industrial average setting a new record as it flirted with the 13,000 mark.
The Dow closed at 12,961.98, making Friday the 15th of the last 16 trading days that it ended the day up. This was the third straight record week.
Leading this recent rally is a spate of earnings reports, showing that some major American companies are doing better than the market had previously thought.
Friday's push came after the street got good news from Caterpillar, the world's largest construction equipment maker, and from aerospace and defense giant Honeywell.
"There's an old saying on Wall Street that profits are the magnet that pull stock price higher," said Alan Skrainka, chief market strategist for Edward Jones. "And right now profits are coming in much stronger than expected, especially in some of old-line industrial companies like Caterpillar and Honeywell."
Other traditional companies, such as American Express, gave the market strong momentum, Skrainka said. "The biggest worries were in the companies that were most sensitive to the economy, as it seemed like our economy was slowing down. Now it seems like things are picking up again," he added.
Friday's close was the 34th record close since the beginning of October.
The Dow dropped 416 points on Feb. 27 to close at 12,216. Since then, the Dow has risen 746 points.
The Dow first crossed 12,000 on Oct 13, 2006, and first closed above that mark on Oct. 19, 2006, according to a spokeswoman for the New York Stock Exchange.
The Dow Jones industrial average is made up of 30 companies including General Motors, Boeing, Wal-Mart and Home Depot. On Friday, most of those companies closed higher than the day before, including the Walt Disney Co., parent company of ABC.
The Nasdaq composite and Standard & Poor's 500 are both at six-year highs.
Also driving the market on Friday was Google, which reported late on Thursday a 69 percent increase in the first three months of 2007.
"Fear of the market turning down has turned into fear of being left out. So now investors are buying back into the market," Skrainka said. "Maybe those are investors that had previously moved to the sidelines."
Skrainka said that while the Dow is at a new record, people are still skeptical and worried about the market. It is not the same as seven years ago, before the tech bubble burst, where there "was record enthusiasm and optimism for the market."
He added that today there is not nearly as much enthusiasm for the market. "Ninety cents of every dollar that was invested in mutual funds last year went overseas. In fact, more Americans invested in an emerging markets last year than in the U.S. market," he said.
"It seems like the grass is always greener on the other side of the fence, but the grass is pretty green right here at home and the stock market is starting to understand that."