Stock Market on Unprecedented Five-year Tear.

• Position: Brief Article

This past October, the U.S. stock market (as measured by the S&P 500) set a new record for returns in a five-year period. From November 1994 to October 1999, the market averaged returns of 26 percent on an annual basis. This bested the previous record of June 1982 to May 1987. Wall Street observers point to two sources of strength in the market: 1) corporate earnings and 2) declining interest rates. The article notes that traditionally, stock price changes would move in tandem with changes in earnings and dividends; however, this analysis would have shown...