Really, Really Good News

It's really amazing to realize how much the stock market has come back and how close it is to the previous all-time high.

To make history, the Dow, which ended 2004 at 10,783, must climb an additional 940 points, or 8.7%.

If the Dow recoups the rest of its 37.8% bear market loss sometime in 2005 - an accomplishment most pundits would have viewed as a long shot a few years back - it would be a huge psychological boost for investors scarred by the worst decline since the 1929 stock market crash ushered in the Great Depression.

"A new high for the Dow would have huge significance," says Neil Hennessy, president of the Hennessy Funds. Indeed, scaling a new peak in the face of war, terrorism, record-high oil prices, rising interest rates, a weakening dollar and the most scandalous period in memory for U.S. companies would serve as the latest proof of the market's remarkable resiliency and uncanny ability to overcome stubborn headwinds.

And the NASDAQ and S&P have more to make up to retake their old highs, if the Dow does it, this should be a very big confidence boost for the economy.