For the second time in less than a month, the stock market marched past another milepost on its long, turbulent journey back from the Great Recession, toppling another record left over from the days before government bailouts and failing investment banks.
The Standard & Poor's 500 closed at a new high Thursday, three weeks after another popular market gauge, the Dow Jones industrial average, obliterated its own closing record. The S&P capped its best quarter in a year, rising 10 percent, and the Dow had its best first quarter in 15 years, climbing 11 percent.
The numbers offer more evidence that investors believe the economy is on the mend, said Sam Stovall, chief equity strategist at S&P Capital IQ.
"The low-flying recovery is gaining altitude," Stovall said, citing a truism among investors that rising stock prices come first, then the economy catches up.
Thursday's performance was driven by encouraging economic data. Companies are making record profits quarter after quarter. They're hiring in greater numbers, and the housing market is finally recovering. The economy has expanded for 14 quarters in a row.
The Fed has helped, too. By keeping interest rates near record lows, the central bank has encouraged people to move money out of savings accounts that pay next to nothing and into stocks and other investments.
Investors warned clients not to get overly excited.
"Getting back to where we were is an important step," said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. But he cautioned in a note to investors: "Markets are volatile, and if you are a long-term investor you should expect declines."
On Thursday, the S&P 500 rose 6.34 points, or 0.41 percent, to 1,569.19, beating by four points its previous record of 1,565.15 set on Oct. 9, 2007. The index is still shy of its all-time trading high of 1,576.09.
The index has now recovered all of its losses from the recession and the financial crisis that followed. Investors who put their dividends back into the market have done even better. A $10,000 investment in the S&P back in October 2007 would be worth $11,270.
On any other day, a market gain of six points would go unheralded but not after the turmoil that began in late 2008 and persisted through a slow, sometimes stalled recovery.
The S&P 500 is a barometer that gauges market performance. And while professional investors might scoff at using it to decide when to buy and sell, the breaking of an old record can be psychologically important.
However, many obstacles still loom.
The U.S. economy is stable, but growth is anemic. Unemployment is 7.7 percent, versus 4.7 percent, the last time the S&P notched a record. The European debt crisis is far from resolved. And some investors are concerned that the market's gains are being fueled by the Federal Reserve's easy money policy and will disappear once the Fed reverses course.
The crisis of the moment is Cyprus, the Mediterranean island country that struggled this week to get an emergency bailout. For many investors, the bailout deal was a reminder of Europe's lingering economic problems. Elsewhere, Italy failed to set up a new government this week, raising fears that the country will be unable to manage its deep debts.
On Thursday, U.S. economic news was mixed.
The U.S. economy grew faster than first estimated in the fourth quarter, the government reported. But the growth, an annual rate of 0.4 percent, was still weak. The number of Americans seeking unemployment benefits jumped for the second straight week. Longer-term, though, applications for benefits have been declining since November.
In Europe, Cyprus reopened its banks after closing them for nearly two weeks to keep depositors from making panicked withdrawals. Portugal reported that its budget deficit was widening.
"If you're a bull or a bear, you could find enough news out there to convince you of your position," said Jim Lauder, CEO of Global Index Advisors in Marietta, Ga., and co-portfolio manager on Wells Fargo Advantage Dow Jones Target Date Funds.
Brian Singer, partner at William Blair in Chicago, said the market's gains Thursday were more about a lack of any major negative developments than the appearance of any good ones.
"We are looking at a realization that Western civilization is not ending as we know it," Singer said. "Fiscal discussions in the U.S. have settled into an acceptable stalemate. The Italian elections that did not result in a government are on hold. Cyprus hasn't sunk into the Mediterranean."
Thursday marked the end of the first quarter, since markets are closed for Good Friday. Overall, it was a strong quarter.
The Dow climbed for the first 10 trading days of March — a record not matched in more than 16 years. In the past 10 days, though, it has wavered under the weight of Cyprus.
The Dow rose 11 percent in the first three months of the year, its best quarterly performance since the fourth quarter of 2011. Last year, it lost ground in two quarters and was up by smaller amounts — 4 percent and 8 percent — in the other two. On March 5, it beat its own all-time record of 14,164.53, which was also set on Oct. 9, 2007, and has been climbing ever since.
To be sure, the S&P 500's last record was followed by a painful downfall. By March 2009, long after the subprime mortgage market had been revealed as an unsustainable bubble, the S&P had cratered from its lofty heights. On March 9, 2009, it fell to its Great Recession low of 676.53 — down 57 percent from its October 2007 pinnacle.
With Thursday's gains, it has climbed 132 percent since reaching the bottom. Including dividends, it is up more than 150 percent.
Associated Press Business Writer Matt Craft in New York contributed to this report.