Dow Jones index hits 23,000

The Dow Jones Industrial Average briefly crossed 23,000 points for the first time Tuesday before slipping back below that threshold.

The blue-chip index reached the 22,000 mark only in August. The Dow has hit four milestones this year, hitting 20,000 in January in a sign of ongoing investor optimism about corporate earnings and broader U.S. economic growth. 

The Dow gained 40 points, or 2.2 percent, to close at 22,997. The S&P 500 and Nasdaq Composite indexes were largely flat on the day.

Stocks have hit a succession of all-time highs in recent months amid unusually low volatility and despite a market that some analysts view as overvalued. That run-up also has been fueled by expectations for tax cuts, which means stocks could decline if talks over fiscal stimulus in Congress hit an impasse. Goldman Sachs analysts forecast that the S&P 500, which is hovering at a record high of 2,556 points, would fall to 2,400 if tax reform fails. 

"Expectations of ongoing earnings growth are reasonably strong, but there may be a bit of a wait-and-see at this point in time given the run in the equity markets," said Jason Pride, director of investment strategy at Glenmede.  

Other market watchers point to steady U.S. economic growth this year, supported by low interest rates, tame inflation and strengthening global conditions, as reasons to expect stocks to keep rising. The nation's gross domestic product -- the broadest measure of economic activity -- was 3.1 percent in the second quarter, the strongest pace of growth in more than two years.

"Corporate earnings are growing, and that growth may very well accelerate, which has also boosted valuations historically," said Brad McMillan, chief investment officer with Commonwealth Financial Network, in a report. "Finally, with the prospect of corporate tax reform, it's possible that earnings might grow even faster than the current economic fundamentals would suggest, due to lower tax rates." 

President Donald Trump touted the latest Dow milestone in a tweet. 

Health care companies notched some of the biggest gains. UnitedHealth Group (UNH), the country's biggest health insurer, rose 5.4 percent after reporting earnings that beat analysts' estimates. The stock gained $10.35 to $203.58. Johnson & Johnson (JNJ) added 2 percent after reporting a strong quarter of its own. Its shares added $2.68 to $138.80.   

Morgan Stanley (MS) rose 1.8 percent after the investment bank served up quarterly results that beat Wall Street's expectations. The stock picked up 88 cents to $49.82. Goldman Sachs (GS) also delivered earnings that exceeded financial analysts' expectations, but its shares were down $4.32, or 1.8 percent, to $238.09.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.32 percent from 2.30 percent late Monday.