Updated: 8:19 p.m. ET

Almost four years after its 2009 bottom, the Dow Jones Industrial Average ($INDU) pushed past both its 2007 closing high and its all-time intraday high on Tuesday.

The blue chips topped the old closing high of 14,164.53 right after Tuesday's open and then blasted through its all-time intraday high of 14,198.10. The Dow closed up 126 points at 14,254. The index hit a new intraday high of 14,286.37.

The rally's catalysts were strength in Asian and European markets after decent economic news from China. As important, a report on the growth in the U.S. non-manufacturing economy was better than expected.The Standard & Poor's 500 Index ($INX) was up 15 points to 1,540, and the Nasdaq Composite Index ($COMPX) rose 42 points to 3,224.

Google (GOOG) hit a new intraday high of $840.15 before closing at $838.68. The shares are up more than 18% this year. Apple (AAPL) was up $11.12 to $431.17. The shares hit a 14-month low on Monday.

Futures trading suggests the U.S. market will open modestly higher. The big economic reports are the Federal Reserve's Beige Book, a narrative look at the economy over the last month or so, and the ADP National Employment Report. This is a look at private-sector job creation ahead of Friday's jobs report from the Labor Department.

Twenty-eight of the Dow stocks were higher on Tuesday, led by Cisco Systems (CSCO), American Express (AXP), United Technologies (UTX) and Boeing (BA). Bank of America (BAC), an institution that exists largely because the Federal Reserve and U.S. Treasury helped keep it afloat in the dark days of 2008 and 2009, was up 23 cents to $11.64.

IBM (IBM), United Technologies and 3M (MMM) contributed 33 points to the Dow's gain.

The day's laggards: Merck (MRK) and Coca-Cola (KO), both with small declines.

The Dow is up nearly 118% from its March 9, 2009, closing low of 6,547.05. The nadir came after the U.S. market overall crashed in the wake of the U.S. housing bust that destabilized the U.S. and global financial systems. The Dow fell 54% between October 2007 and March 2009.

The rally may provide enough momentum for the S&P 500 to surge through its own 2007 highs this week. The index was just 24 points below its closing peak of 1,565.15, also set on Oct. 9, 2007. The Nasdaq is still about 36% below its all-time high, set during the tech boom's height back in March 2000.

But the market may also be setting itself up for a 5%-to-10% correction, said Alec Young, global equity strategist at Standard & Poor's. He sees the vulnerabilities increasing when the S&P 500 moves past 1,565.

The Dow's rebound since 2009 has been keyed by huge gains in such stocks as American Express, up about 500%; Home Depot (HD), up 287%; Caterpillar (CAT), up 280%; and IBM, up 148%. 

Twenty-nine of the Dow's 30 current members are higher than they were in March 2009. The exception is Hewlett-Packard (HPQ), which is down 20% over that time, a victim of falling sales of personal computers in the past few years and extreme management turmoil.

The big market rally since 2009 reflects several factors:

• The Federal Reserve's efforts to boost the economy since the 2008-2009 bust. The Fed has kept short-term interest rates at nearly 0% and has vowed to keep them low until U.S. unemployment falls below 6.5%. The unemployment rate was 7.9% in January, and the February jobs report is due on Friday.
• A modest economic recovery in the U.S. and better results in Asia. Though still high, the U.S. unemployment rate has come down from a peak of around 10%.
• Renewed vigor in key industries including autos, technology and banking. The housing industry is also finally showing signs of recovery from its deep slump.

The rally is not without its critics. "The market is trading on politics," says Patricia Edwards, chief investment officer at Trutina Financial, a Bellevue, Wash., money-management firm.

Many worry the Fed's efforts will lead to inflation or worse. And it doesn't reflect how austerity moves in Washington may derail the U.S. recovery.

But Edwards notes that the Fed isn't alone in keeping interest rates low. Central banks in Europe and Asia have been as active as the Fed in trying to stimulate their economies.

Until they all stop, the big rally since 2009 may continue to expand, despite how ugly it looks. "It's like a teenager with pretty severe acne," Edwards says.

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