Dow hits another major milestone -- 5,000 points in a year

The Dow Jones industrial average has climbed 5,000 points in a year for the first time in its history, punctuating a 2017 filled with milestones.

The Dow was up 138.37 points at 24,790.11 around 1:40 p.m. ET on Monday. That put the average's total gains for this year at 5,027 points and pushed it closer to the 25,000 landmark.

The latest surge for blue-chip stocks is powered by Wall Street’s positive reaction to the Republicans' tax cut plan, which appears to be on track to pass this week. If the bill passes, it could provide a fresh boost to U.S. growth and corporate earnings. Republican lawmakers finalized the bill to overhaul taxes on Friday.

The centerpiece of the bill is a sharp cut in the corporate tax rate to 21% from 35%. That change alone has boosted investors’ so-called “animal spirits,” or willingness to take risk.

Bill Stone, chief investment strategist at PNC Asset Management Group, said investors are encouraged that the GOP tax cut agreed upon in joint-chamber negotiations was larger than either the House or Senate bills individually.

“Today is probably the continuation of some optimism on tax reform,” Stone said, adding that the plan’s allowance of businesses to writing off capital expenditures was another catalyst.

The Dow's rally, which has come without a drop of 5% in more than 18 months, has also been fueled by an economic recovery worldwide, which has boosted the profitability of American companies, reduced the U.S. unemployment rate to 4.1% and lifted the confidence of investors.

Those broader trends have helped the Dow barrel through 1,000-point milestones at the most prolific pace in its 121-year history. The first landmark it passed was 20,000, five days after President Trump took office in January. Dow "21K," "22K," "23K" and "24K" weren't far behind. And if the stocks blow past 25,000, Wall Street is buzzing that "30K" may not be far behind. 

Among Monday's winners was billionaire investor Warren Buffett's Berkshire Hathaway. Shares of the Oracle of Omaha's company briefly traded above $300,000 for the first time in their history.

Stone said there are no concrete indicators that the markets will lose their momentum anytime soon, although he acknowledged that a selloff is possible at some point even if the economic conditions remain strong.

“It is going to get to a point where it can’t get any better anymore,” he said. “In the market it’s always brightest before it gets dark.”