Stocks: Not Out of Breath Yet

As the Dow Jones industrial average and S&P 500 hit new highs, bulls argue there's still plenty of money on the sidelines

Investors got at least two big surprises this week: a plunge in China's stock market similar to the one that prompted U.S. stocks to dip in February (see, 5/30/07, "China Stocks Tumble Back Toward Earth") and a report that the U.S. economy barely budged in the first quarter. But instead of wallowing in the gloom, U.S. investors got even more giddy and pushed the Standard & Poor's 500-stock index and other indexes to new records. "The stock market has taken good news and bad news, and has spun it as good news," said Jay Suskind of Ryan Beck.

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