Is Wall Street's new high too high?

They were dancing on the Street on Tuesday -- to a couple of new records.

Investors, who have been pouring money into stocks, drove the Dow up to its fourth record close this year -- 16,715.

And have a look at this: In 2009 the Dow bottomed out, during the Great Recession, at 6,547. It is now two and a half times higher.

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The market keeps surging past milestones, making traders nervous
CBS News

The S&P 500 -- a broader measure of stocks - closed on Tuesday at a record 1,897. But at one point, it was even higher.

Even on a slow day on Wall Street, the markets keep surging past milestones. On Tuesday, it was the S&P slipping past 1900.

When a market moves this quickly, it makes veteran trader Alan Valdes nervous.

"Are we a little frothy?" asked Vales, who is with DME Securities. "Well, it was only a year ago we were at 1600."

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Alan Valdes says the market is not a reflection of the economy
CBS News

That milestone, by comparison, was a long time coming. It took 13 years for the S&P to climb from 1,500 to 1,600, which it finally reached last may. But it hit 1,700 just 90 days later, 1,800 113 days after that and on Tuesday, six months later, crossed 1,900.

Is this market in any way a reflection of the economy?

"Not at all," Valdes said. "That's the sad thing. You have a market on Wall Street and an economy on Main Street. The economy on Main Street is still very weak."

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Momentum is strong on Wall Street
CBS News

Retail sales barely rose in April, a disappointing sign. But even bad news hasn't been able to derail this rally.

"It's the only game in town," Valdes said. "Where are you going to go? You can't put your money in a bank. Overseas is falling apart. You look at Europe. You look at China. Those markets are getting weaker and more dangerous to get involved in. So basically this is safe haven."

Is it a bubble? Price to earnings ratios haven't been this high since 2010. But with momentum this strong, some traders say this rally could go on for a while yet.

  • Anthony Mason

    CBS News senior business and economics correspondent; Co-host, "CBS This Morning: Saturday"

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