updated 3/17/2010 5:59:58 PM ET 2010-03-17T21:59:58

The stock market has a new formula for success: a slow and steady trek higher.

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The Dow Jones industrial average rose 48 points Wednesday in its seventh straight advance to close at a new high for 2010. The gain means the Dow has joined the Standard & Poor's 500 index and Nasdaq composite index in reaching the best levels since 2008.

Stocks reached the new highs by climbing almost in stealth mode. The Dow is up 825 points in about five weeks but the gains haven't come in the 100-point pops that were common during much of the market's climb in the past 12 months. There have only been a few of those big days in recent weeks. Most of the increase has come from gains that don't make headlines, like 45 points, or 10.

The gains could always unravel but it makes for a more sustainable climb when investors mostly nibble at stocks.

"Boring is the new sexy," said Neil Menard, principal at Steben & Co. in Rockville, Md.

The advance is occurring in part because investors' list of worries isn't growing. There are still big problems like unemployment and government deficits but they're not new. And some worries are easing. Greece is taking steps to tackle its debt problems, for example. There had been fear its problems would spoil a global recovery.

The catalyst for this latest increase was the Fed's decision Tuesday to hold its key lending rate at a record low of essentially zero. A government report that prices at the wholesale level fell by the biggest amount in seven months boosted investors' belief that inflation is being contained.

It's clear from the market's climb that investors are feeling more upbeat. Since Feb. 8, the Dow is up 8.3 percent. That's a big gain that might ordinarily take a year to accomplish. But the Dow had slumped 7.6 percent in the month before that, so a rebound isn't surprising.

What's more important is the way the market is climbing: in almost a stairstep pattern. The Dow hasn't swung by more than 100 points in 12 of the past 14 trading days.

The more modest advances signal to some analysts that investors aren't getting overconfident.

"This market is behaving just the way you like to see," said James Meyer, chief investment officer at Tower Bridge Advisors in Conshohocken, Pa.

On Wednesday, the Dow rose 47.69, or 0.5 percent, to 10,733.67. The Dow topped its earlier high for 2010 of 10,725.43 from Jan. 19. It is at its highest point since Oct. 1, 2008. The seven-day streak of gains is its longest since August.

The S&P 500 index rose 6.75, or 0.6 percent, to 1,166.21. That's the highest close since Sept. 30, 2008.

The Nasdaq rose 11.08, or 0.5 percent, to 2,389.09, its best level since Aug. 28, 2008.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.64 percent from 3.66 percent late Tuesday.

The big question for investors is whether the climb can hold. Analysts say some of the apprehension about the economy is keeping the market in check.

Investors are signaling that they expect the economy to strengthen by where they are placing their money. Since last month, the best-performing stocks have been in the basic materials, consumer durables, financial and transportation industries. These tend to do best in stronger economies.

The laggards have been safer businesses that investors flock to during recessions: consumer staples, utilities, telecommunications and health care.

The market will need a steady stream of good news for the advances to continue. The latest gain came after the Labor Department's Producer Price Index fell 0.6 percent in February. Economists polled by Thomson Reuters forecast a drop of 0.2 percent. Fed poliycmakers will be able to hold interest rates lower if they don't have to worry about inflation for now.

David Chalupnik, head of equities at First American Funds, said that the market is likely to climb for the next six weeks as expectations build for corporate earnings for the January-March quarter. As the results come out, investors could start to sell some stocks that posted strong gains ahead of the reports.

But some analysts warn that the recent climb is a sign that investors are letting their guard down.

The Chicago Board Options Exchange's Volatility Index, which is known as the market's fear gauge, on Wednesday fell below 17 for the first time since January. That means there are fewer investors predicting big drops in the market. The VIX was last this low before stocks began a three-week slide.

Axel Merk, portfolio manager at Merk Funds, warned that simultaneous gains in assets from stocks to commodities and even real estate signal that investors are investing indiscriminately.

"That's the clearest bubble indicator there is," he said.

In other trading, the dollar fell against other major currencies. Gold prices rose.

Crude oil rose $1.23 to settle at $82.93 per barrel on the New York Mercantile Exchange.

More than two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1 billion shares, in line with Tuesday.

The Russell 2000 index of smaller companies rose 4.40, or 0.7 percent, to 683.98.

Britain's FTSE 100 gained 0.4 percent, Germany's DAX index rose 0.9 percent, and France's CAC-40 climbed 0.5 percent. Japan's Nikkei stock rose 1.2 percent.

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