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Out Like A Bull: 2013 Was A Banner Year For Wall Street

Philips Lighting North America CEO and President Bruno Biasiotta rings the opening bell at the New York Stock Exchange in New York, on Tuesday. i i

Philips Lighting North America CEO and President Bruno Biasiotta rings the opening bell at the New York Stock Exchange in New York, on Tuesday. Seth Wenig/AP hide caption

itoggle caption Seth Wenig/AP
Philips Lighting North America CEO and President Bruno Biasiotta rings the opening bell at the New York Stock Exchange in New York, on Tuesday.

Philips Lighting North America CEO and President Bruno Biasiotta rings the opening bell at the New York Stock Exchange in New York, on Tuesday.

Seth Wenig/AP

U.S. stocks in 2013 posted their best showing since 1997, with the Dow Jones Industrial Average closing up 26.5 percent, the Standard & Poor's 500 Index up 29.6 percent and the Nasdaq up 38 percent.

NPR's Jim Zarroli says Wall Street's stellar performance was set against the backdrop of a U.S. economy that continued to limp along.

Brad McMillan, the chief financial officer at Commonwealth Financial Network, tells NPR "The stock market surprised everybody."

"No one expected the kind of performance we've had," he said.

McMillan says at the beginning of the year there were plenty of reasons to expect stock prices to decline. Sequestration and tax increases were seen as likely dampers on investment and growth.

And yet, stocks climbed anyway.

Jeremy Glaser, markets editor at Morningstar, tells Zarroli that one big reason stocks did so well was that interest rates stayed low. And when interest rates are low stocks benefit.

However, Glaser points out that it's pretty unlikely that the market can keep growing at these levels for much longer. Corporate profits aren't keeping pace. And interest rates will continue to edge up.

McMillan says by almost any measure right now stocks are pretty richly priced.

"We're not in bubble territory but certainly you can see it from here," he says.

Correction: A previous version of this story misspelled Jeremy Glaser's surname. The error has been corrected.

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