S&P 500 Close to Doubling Since 2009 Low

The benchmark Standard & Poor's 500 Index only has to go up a tick or two before it doubles from its March 2009 trough. The index fell to under 677 on March 9 that year, and closed just short of 1,325 Tuesday. The advance is a 95% improvement in well under two years.

Investors have to wonder if a 2X return is warranted. The market seems poised to move high, and some forecasters believe it could be up another 20% this year. The S&P PE is just above $24. That's not terribly high by historic standards. Earnings among the companies in the index are expected to rise on balance further this year.

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The broader economy and expectations for the remainder of the year, however, may not support a further improvement in the S&P. The consensus among analysts is that GDP will rise by slightly more than 3%, which is no better than modest. Credit may be available to large companies, but it is not to small firms. Small businesses are one of the engines of a recovery. If they can't borrow and expand, this will undermine better economic growth.

The largest drags on the economy remain joblessness and the housing market. S&P has forecast home prices could drop another 7% to 10% this year. Foreclosures are still near historic highs. Unemployment rates are not likely to improve sharply. Even Federal Reserve Chief Ben Bernanke does not expect a greatly improved job market for another two years. The unemployed remain a problem for consumer confidence and consumer spending.

We still don't know whether there is such a thing as a long-term jobless recovery. If there isn't, the stock market may peak soon.