Stock portfolio strategists are facing a shorter time to make their decisions about bets on the US equity market as the end of the year looms and the indices appear to have taken on a life of their own.

The S&P 500 index of the broader US market is at its highest level for two and a half years, having put on 6.4 per cent in the past two weeks, its best such stretch since March 2003. Meanwhile, the Dow Jones Industrial Average and the Nasdaq Composite are at four-month highs, with the Dow having just ended its best week in 19 months.

Joseph Battipaglia, chief investment officer at Ryan Beck, said: "With each passing day the market moves higher, it's going to be harder to pull the trigger and invest, you have to go in sooner rather than later."

During last week's rally there were signs of so-called buyers' panic: rising trading volumes even as share prices were also rising, which suggests investors wanted to participate in the advance as prices were rising, in order to avoid even higher opportunity costs several sessions later.

Phil Dow, director of equity strategy at RBC Dain Rauscher, noted that US corporations outside the financial and agriculture sectors have the most cash on balance sheets since 1959 as a percentage of gross domestic product. In addition, the favourable tax treatment of capital expenditure is set to end, which could cause many companies to increase capital expenditure, he said.

However, threats remain to the performance of the US stock market, in the form of ongoing terrorist attack risks and the prospect that the most recent decline in crude oil prices might only be a temporary retreat before another sharp charge upwards.

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