Americans seem to be falling in love with stocks all over again.
After millions of people all but abandoned the market following the 2008 bust, individual investors are pouring money into stock mutual funds like they haven’t in years. The flood, fueled by fading economic threats and better news on housing and jobs, has helped propel the broad market to within a few good days of its highest level — ever.
“You’ve got a real sea change in investor outlook,’’ said Andrew Wilkinson, chief economic strategist at Miller Tabak Associates.
Americans’ latest stock-market romance is only a few weeks old and could easily fade before it becomes something more serious. Indeed, some market watchers warn that given the big run-up in prices, the market is ripe for at least a brief correction.
Still, the optimism that has pervaded the market in recent weeks is a marked change from recent years. Until very recently, many investors of all stripes had continued to shy away from stocks in the face of a trio of hovering problems — the potential breakdown of the eurozone, fears of a stalling Chinese economy, and political brinkmanship in Washington that threatened to drive the economy into a recession.
One after another, these threats appear to have dissipated. Last week, Congress found a short-term way around the debt ceiling — sidestepping GOP threats of allowing the government to default on its debt when it reached a self-imposed borrowing limit in February or March.
As the fog of crisis has cleared, investors have been able to more clearly focus on economic data pointing to a growing housing market, a shrinking unemployment problem, and stronger-than- expected corporate earnings.
“The last few weeks represent the belief that there will be no existential threat to any large global economy in 2013,’’ said Nicolas Colas, chief market strategist at BNY ConvergEx group.
The benchmark Standard & Poor’s 500 index finished Friday up 8.14 points, or 0.5 percent, to 1,502.96. The Dow Jones industrial average rose 70.65 points, or 0.5 percent, to 13,895.98. That is a couple hundred points shy of the all-time high of 14,164.53 on Oct. 9, 2007. The Nasdaq composite index climbed 19.33 points, or 0.6 percent, to 3,149.71.
Russ Koesterich, chief investment officer at BlackRock, said the current threats are ‘‘mundane’’ in comparison to what investors have faced over the past few years. ‘‘We’re not talking about big crises anymore,’’ Koesterich said.