Stocks skyrocket in January

U.S. stocks have been on a tear in January, moving major indexes within striking distance of all-time highs. The bearish case is a difficult one to make right now.

Earnings have exceeded expectations, the housing and labor markets have strengthened, lawmakers in Washington no longer seem to be the roadblock that they were for most of 2012, and money has returned to stock funds.

The Standard & Poor's 500 index is up 5.4 percent this year and above 1,500. The Dow Jones industrial average is just 2 percent away from all-time highs reached in October 2007.

The most recent Reuters poll of Wall Street strategists estimated the benchmark S&P index would rise to 1,550 by year's end, a target that is 3.1 percent away from current levels. That would put it a stone's throw from the index's all-time intraday high of 1,576.09 reached on Oct. 11, 2007.

The new year has brought a sharp increase in flows into U.S. equity mutual funds, and that has helped stocks.

That's not to say there are no concerns. Economic growth has been steady, but not as strong as many had hoped. The household unemployment rate remains high at 7.8 percent. And more than 75 percent of the stocks in the S&P 500 are above their 26-week highs, suggesting the buying has come too far, too fast.

-- Reuters