Wall Street Stampede

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A confluence of good news fueled Wall Street today, pushing the Dow up 201 points -- and the Standard & Poor's 500 up to record levels. "The rallies in Asia got it started," says FORTUNE Wall Street columnist Nelson Schwartz. "They were an excuse for investors to say, 'The worst is over.' But that was just part of it; there's the drug merger, and everyone got a little excited with Clinton's announcement of a balanced budget."

Yet most investors know that the fallout from flagging Asian markets won't be fully felt in the U.S. until summer. And the balanced budget announcement was hardly unexpected. So how does such middling good news produce a milestone-setting rally? Schwartz says investors, who traditionally funnel 401(k) money and year-end bonuses into the market in January, hesitated this year. That money may have started to flow Monday. "The strong week last week may have gotten everyone ready psychologically," he notes. "Nobody wants to miss the next big surge." For Tuesday, Schwartz predicts more strength for the drug and tech sectors -- but the ripple effect to the broader markets may be over.