Stock prices: A bubble or back to normal?

Federal Reserve Chairman Ben Bernanke fielded the usual questions about inflation, tax cuts and government debt during a trip to Congress last week. Then a new question popped up: Is the Fed creating another bubble in stock prices?

Bernanke told the Senate Banking Committee he saw "little evidence" that was happening, but cautioned: "Of course, nobody can know for sure."

That's the problem with bubbles. You only know you're in one when it pops.

This week is the second anniversary of the bull market that followed the financial meltdown. The Standard & Poor's 500-stock index is in its fastest climb since 1955, doubling since the market bottomed on March 9, 2009. In January and February alone, it's up 5.5 percent.

Stock bubbles are famously hard to define. In 1999, investors thought it was perfectly rational to pay 62 times a company's earnings per share for a technology stock because it seemed dot-com companies couldn't lose. Many of those companies turned out to be nothing more than slick marketing ploys.

After two bubbles in the past 10 years - tech stocks and real estate - investors are suspicious of consistent gains. Some worry that the Fed's dramatic measures to pump up the economy mean the market's gains are an illusion. But a range of measurements suggests the market isn't in the midst of a bubble now. Instead, the stock market may simply be back to normal.

"Bubbles occur when there are high valuations, evidence of lots of borrowing to lever up to buy something," said Bob Doll, market strategist for asset-management giant BlackRock. "When I look around the landscape I have a hard time finding anything that looks like that."