HispanicBusiness

When it comes to big round numbers with major investment significance, 14,000 is as big as it gets for the Dow Jones industrial average.

Indeed, Dow 14,000 is back in play and in the headlines after the iconic 117-year-old blue-chip index topped that lofty milestone Friday for the first time since October 2007. The 149-point gain pushed the world's best-known stock gauge to a close of 14,009.79, its best level since the 2008 financial crisis. The index is not far from its Oct. 9, 2007, all-time high of 14,164.53, and its recent ascent is prompting talk on Wall Street of a new peak, and even Dow 15,000.

The Dow's heady rush to levels not seen in more than five years -- and potentially to heights never seen -- has elicited feelings of renewed hope and cautious optimism on Wall Street.

The sense of optimism comes from the fact that the Dow's rise reflects a growing belief among investors that economies, both in the U.S. and globally, are in a better place and on the road to recovery. Any signs of a sustainable economic recovery will also prove bullish for corporate profitability at a time when American companies in the Standard & Poor's 500-stock index are already on track to post record earnings per share of $103.40 in 2012.

"This is just the beginning," says Jeremy Siegel, a finance professor at the Wharton School of business at the University of Pennsylvania. He sees the Dow climbing to 15,000 or higher by the end of the year. "I think this is going to be a 20%-plus year for stocks," he says.

Siegel says that with cash yielding 0% and 10-year U.S. Treasury notes paying roughly 2% in interest, investors in search of bigger gains have few alternatives and have little choice other than to buy stocks. "Where else are they going to go for returns?" Siegel asks.

And stocks have been the place to make money in recent years. The Dow is up 6.9% in 2013 and has rallied 114% since the bear market low in March 2009.

Risk-averse Main Street investors now have $2.4 trillion parked in money market funds, $6.7 trillion in bank savings accounts and $633 billion in low-yielding certificates of deposit, according to Peter Crane, publisher of Money Fund Intelligence, citing Federal Reserve data.

The lingering skepticism on the part of some investors comes from the knowledge that Dow 14,000 is an area where the stock market topped out in 2007 and a level that has acted more as a ceiling for stock prices than a floor.

In fact, the Dow only closed above 14,000 on nine trading days in 2007, including its first-ever close above that psychologically important number on July 19, 2007.

It is not an overstatement to say that Dow 14,000 is the biggest round number the Dow has ever had to hurdle in its long history. "Rarified territory is a good way to describe it," says Jamie Farmer, managing director at S&P Dow Jones Indices.

And the thinner the air, the tougher the slog. "We are back to levels where the market has had trouble sustaining highs in the past," says Richard Moroney, editor of Dow Theory Forecasts newsletter.

Hold on, not so fast

While the Dow has a good shot at hitting a new high in 2013, it's more likely it will soon stop going straight up and, instead, settle into a trading range keeping it around 14,000 for most of the year, cautions Jeff Kleintop, chief market strategist at LPL Financial.

He notes that the blue-chip gauge got off to a rip-roaring start last year and quickly climbed to 13,000 before stalling and not breaking out for good until December.