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After closing above 11,000 for the first time since June 2001 on Monday, and sparking a day-long debate on Wall Street as to whether that benchmark even matters, the Dow Jones industrial average briefly gave up enough ground on Tuesday to dip below the threshold before jumping back once again. Look for more see-saw moments ahead as the Dow tries to eclipse its all-time high of 11,723, which was reached six years ago and which many market pros believe finally will be seen again later this year. That's not exactly a news flash: it would require only a 6.5% move, which should be a slam-dunk in any year without a recession on the immediate horizon.

Street curmudgeons will tell you the 11,000 mark doesn't matter, that it's just a number. But after six years without making a dime, as the Dow's long doldrums suggest has been the average investor's experience, hitting a big number like 11,000—and holding it—may be more important than many believe. The stock market is as much an emotional barometer as it is a gauge of the economy. Indeed, if stocks were purely rational, the Dow would have set a new record by now. GDP growth is on track, inflation is tame, corporate earnings are good, dividends are up and values have become attractive. Large-cap valuations in particular, says Leon Cooperman, who runs the $4 billion hedge fund Omega Advisers, "are reasonable."

Quibble all you want about things like the deficit and inverted yield curve. In general, the fundamentals look pretty good. Arguably, the only thing missing from this market has been a healthier psychology, wich is understandable, given how long stocks have suffered. But just maybe a round number like Dow 11,000 will finally get investors to think about the upside of stocks again. If so, there are trillions of dollars in money market accounts, trillions more possibly looking to get out of real estate, and another trillion-plus of buying power collecting dust at private equity firms—much of which could move into the stock market and help topple the old record sooner rather than later.

• Daniel Kadlec
• The Dow, having closed above 11,000 two days in a row, may convince nervous investors to venture beyond money market accounts once more