The rally has pushed stocks close to record levels. The Dow is 178 points off its record close, reached in October 2007, and the S&P is 53 points below its all-time high, achieved in the same month.
“We've had a really nice move up here, whether we graduate to the next level, I think is questionable,” said Ben Schwarz, Chief Market Strategist at Light Speed Financial. “We're looking for something to spark it.”
More than half of the companies in the S&P 500 have now reported earnings for the fourth quarter and analysts are expecting earnings for the period to rise by 6 percent, according to data from S&P Capital IQ. That puts earnings growth on track to increase for the third straight quarter after slowing to 0.81 percent in the second quarter of 2012.
As investors have become more comfortable holding riskier assets like stocks, they have cut their holdings in defensive investments like U.S. government bonds, sending yields on those bonds higher.
The yield on the 10-year Treasury note, which moves inversely to its price, has risen more than 20 basis points since the start of the year and is trading close to its highest level since April. The yield fell 4 basis points to 1.96 percent Wednesday.