Punctuating a remarkable rebound, the Dow Jones industrial average closed above 14,000 Friday, more than double the low it hit during the depths of the financial crisis in 2009.
The market was pushed above the threshold by good news on the jobs front, the latest economic indicator signaling the country has made solid progress recovering from the worst financial crisis since the Great Depression.
And while individual investors remain cautious, some are starting to get back into stocks.
"I have had customers who wanted to stay in cash and didn't want anything to do with the equity markets," said Sandra Wales, a principal executive with San Jose-based Wales Investments. "A lot of people were fearful of 2008 happening again. Now they seem to be coming back in."
The blue-chip Dow closed up 1.1 percent to finish at 14,009.79, its first finish over the 14,000 benchmark since Oct. 12, 2007. The broad-based S&P 500 index rose 1 percent to finish at 1,513.17. The technology-focused Nasdaq jumped 1.2 percent to close at 3,179.09.
Many stock traders and individual investors appeared to be buoyed by a series of solid economic reports related to jobs and manufacturing.
The nation's employers added 157,000 payroll jobs in January, and government officials also revised job gains from previous months. However, the jobless rate worsened slightly and rose to 7.9 percent in January, compared with a 7.8 percent rate in December.
But a gauge of consumer confidence issued by the University of Michigan climbed to 73.8 in January from 72.9 at the end of December. Plus, a measure of U.S. manufacturing reached the highest level since April.
Since April 2011, investors have pulled more cash out of U.S. stock mutual funds than they've put in, according to the Investment Company Institute. In the past three weeks, though, that trend has reversed, which could make January the first month in nearly two years in which stock-focused funds had a net inflow.
"The economy seems to have stabilized," Wales said. "Jobs are being added. Home prices are rising."
Despite the gains, some individual investors remain wary and have stayed on the sidelines after suffering massive losses as the economy collapsed.
"I hope the market keeps going up, but the 14,000 number doesn't mean that much," said Rod Rado, a Sunnyvale resident. "I lost a lot during the market meltdown in 2008. I'm just starting to break even from that."
"I know there are encouraging signs about stocks and the economy, but I'm still skeptical," added Larry Davis of Antioch. "The stock market is a house of cards. A lot of us were severely burned in the past."
Others stuck it out during the fall.
"I had stocks even during the bad times," said Geoff Cleary of Pleasanton. "I used it as an opportunity to buy a lot of stuff cheaply."
Cleary has been invested in the stock market, primarily through a 401(k), for more than eight years, a stretch that includes the most recent recession and the financial crisis.
For some investors, the big fall in stocks left a lasting impression.
"I don't trust the stock market," said Clint Atkins, a San Jose resident. "I took my money out, and put all of it in gold."
Atkins bought gold in 2006 when it was about $650 an ounce. On Friday, it closed at $1,669.
And he plans to keep his money there.
"Gold will continue to go up because the government is printing money," said Atkins, referring to the Federal Reserve's economic stimulus efforts.
"It's encouraging to see the stock market rising, but I have a long-term view," said Katy Schlueter, a Fremont resident. "I was in the market during the financial crisis and you could see the same thing happen again with a big decline in stocks."
Financial planners advised a cautious approach for investors.
"There are government spending and debt issues still," said Jeffrey Elfont, president of Walnut Creek-based Pinnacle Capital Management. "Hedge funds are using borrowed money to invest in the stock market. That is money that doesn't stick around very long if things go badly."
The Associated Press contributed to this report. Contact George Avalos at 408-373-3556 or 925-977-8477. Follow him at Twitter.com/george_avalos.
Here is how some widely followed Bay Area stocks have done in the 12 months that ended Friday. The figures show the percent change.
Chevron +9.2 percent
Apple -1.8 percent
Google +26.7 percent
Wells Fargo +13.7 percent
Oracle +22 percent
Safeway -11.5 percent
Hewlett-Packard -42.8 percent
Source: Yahoo Finance