The S&P 500 Index closed above 2,000 for the first time ever yesterday. It had cleared 2,000 on Monday as well, but fell back below the mark before the end of the day. In the five years since the S&P bottomed out in 2009, the index has nearly tripled - it's up 195 percent over that time.
The Nasdaq is also closing in on a record. It's within 10 percent of the high it set back in March 2000. That has some pundits comparing the current market to the dot-com mania of the late 1990s.
But there's an important difference between the two eras. When the dot-com bubble peaked, the S&P 500 was trading at close to 30 times the annual earnings of its companies. Although valuations have been rising, they are still only about 19 times earnings right now.
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