Dow briefly surges past 26,000, just 12 calendar days after surpassing 25K

Adam Shell | USA TODAY

Show Caption Hide Caption Week ahead: Spotlight on earnings, China growth Markets were upbeat ahead of a bumper week of corporate earnings in the US. But as David Pollard reports, oil, the euro and China could also shift sentiment. Video provided by Reuters

The milestone-busting Dow briefly topped 26,000 for the first time Tuesday as stocks continue to surge at the start of 2018 amid rising optimism that tax cuts will lift corporate earnings and the economy.

But the euphoria faded by the end of the trading session.

The blue-chip stock index, which rallied more than 280 points in early trading to eclipse "26K" just 12 calendar days after toppling the 25,000 milestone, finished the session down 10 points at 25,793. The decline leaves it more than 200 points shy of its first close above 26,000.

Stocks have picked up where they left off in 2017. Investors are piling into the market as Wall Street analysts boost their projections of how much money U.S. companies will make this year after Congress slashed the corporate tax rate late last year to 21% from 35%.

The Dow, which gained 25.1% last year, is off to a fast start in 2018. It is up nearly 1,100 points, or 4.3%.

Some Wall Street pros are starting to worry that investors are getting overly exuberant, despite the improving business conditions that are driving stocks higher early in the new year.

"At some point something happens that crystallizes the confidence of investors and makes it seem likely (that the good times) will go on forever — and investors go from positive to all in," says Brad McMillan, chief investment officer at Commonwealth Financial Network. "We seem to be seeing that now."

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