U.S. stock market nears milestone heaven

• U.S. stocks keep climbing up%2C up%2C up%21
• Dow 16%2C000 is within reach%2C as is 1800 on the S%26P 500 and Nasdaq 4000
• Wall Street debates whether run-up is sign of healthy bull or market bubble

NEW YORK — The stock market, which has been melting up most of this record-breaking year, is on the cusp of achieving a troika of major milestones.

Dow 16,000 is within easy reach for the first time. The Standard & Poor's 500 is fast approaching 1,800. And the Nasdaq composite is nearing 4,000 for the first time since the dot-com bubble burst in 2000.

Whether those psychologically potent numbers are a sign of a healthy bull market — or indicate a stock market bubble — is a matter of opinion.

"Up is a beautiful thing," says Bob Doll, chief equity strategist at Nuveen Asset Management. "Big round numbers don't ... scare me."

But milestones do attract the attention of investors, including many who might feel pressured to get in the market after missing out on the gains because they've been on the sidelines.

"Dow 16,000 will grab headlines," says Alan Skrainka, chief investment officer at Cornerstone Wealth Management, adding that chasing returns in an undisciplined way is a "bad idea."

Keeping up with the market has been tough. The S&P 500 is up 26.1% in 2013 and notched 36 record closes as of Friday, the most since 1998, according to S&P Dow Jones Indices.

Doll says the path of least resistance for stocks is up, citing continued improvement in the U.S. and global economies.

Optimists say the Federal Reserve's investor-friendly bond-buying program, which stimulates the economy by keeping borrowing costs low, is likely to continue under Janet Yellen if she replaces Fed Chairman Ben Bernanke — as expected. "I don't think you can deny there's a 'Yellen Effect,' " says Chris Bouffard, chief investment officer of the Mutual Fund Research Center.

The S&P 500 is trading at 16 times its earnings over the past four quarters, putting valuations in line with historical averages. "The market," says Ed Yardeni, chief investment strategist at Yardeni Research, "is not cheap. But it's not overvalued."

Still, a growing crowd warns that the stock market is getting ahead of itself.

Richard Suttmeier, chief market strategist at ValuEngine.com, says the Fed's easy-money policies, which received an endorsement from Yellen at her confirmation hearing Thursday, are creating the conditions for a dangerously frothy market. The Fed's $85 billion in monthly bond purchases is inflating asset prices, he says.

"There's substantial risk for a market melt-up, which are often followed by meltdowns," adds Yardeni.

Even though optimism is rising, sentiment is not excessively bullish like it was at the past market tops, says Craig Johnson, technical market strategist at Piper Jaffray. "I was there in 2000. I was there in 2007. And it does not feel the same," he says, adding that he's sticking to his S&P 500 year-end target of 1,850 — up almost 3% from Friday.