High-flying markets should beware Icarus lesson

US stocks rose again last week as prospects of a major tax cut and solid economic data offset mixed earnings.

This week, strong factory data and a wave of earnings from some of the biggest technology companies should lead to further highs, unless a crisis in Spain derails global markets.

For weeks, Wall Street pundits have warned that the market has gone too far, too fast. The ever-contrarian stock market responds to these warnings by accelerating its gains. The Dow Jones Industrial Average has finished at a record high 53 times this year, and is now trading above 23,300, up 18 per cent for the year to date. If the Dow keeps rising at this pace, it would record its best year since 2010 and - before that - 2003.