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Wall St. Bears Turn Bullish, Investors Agree

A roster of financial-market heavy hitters have come out in recent days waving their bullish flags and hailing the virtues of buying into U.S. equities right now, as the stock market dances around record-high levels, and the overall economy shows signs of improvement.

The rhetoric has been loud and clear, with the likes of banking analyst Meredith Whitney, who became a household name after predicting Citigroup's troubles before the financial crisis in 2008, quoted by CNBC as saying she has never been "this bullish on the U.S., on equities" in her entire career.

Her strong language came just a day after Morgan Stanley's U.S. equity strategist and noted bear Adam Parker revised his projections for the S&P 500 in a research note, raising his 2013 target to 1,600 from his previous November-released estimate of 1,434 by year-end. It closed on Tuesday at 1,538.34.

The two of them, and others such as Deutsche Bank's David Bianco and Goldman Sachs' David Kostin-all known for their less-than-bullish views on the markets, as the Wall Street Journal noted Tuesday-are now part of what seems like a growing club of strategists who see the U.S. stock market as a super-safe bet given many of the uncertainties still in the global economy, most recently problems in Cyprus.

So far, ETF investors seem to be listening. In the month of February, they poured more than $3.70 billion into U.S. equities ETFs and have added another $9.4 billion into the segment in the first two weeks of March alone, according to data compiled by IndexUniverse.

The massive inflows have helped propel total U.S.-listed ETF assets, along with market action, to unprecedented levels hovering around $1.45 trillion-and U.S. equities ETFs now snag nearly half of that total.

The inflows came as the Dow Jones industrial average raced to record level after record level for 10 days straight, while the S&P 500 last week came within roughly 2 points of its still-unmatched 2007 record high closing. The $12.5 billion SPDR Dow Jones Industrial Average ETF (NYSEArca:DIA), tracking the Dow, also climbed to brand new highs, closing one day last week at $145.33 a share, its highest closing strike ever, while the $127.7 billion SPDR S&P 500 ETF (NYSEArca:SPY) forged new highs.

The fundamental backdrop seems to point to an improving economy if the latest round of economic data is any indication. Dropping unemployment rates, recovering housing values, strong retail sales and measured inflation targets all are adding fodder to the perception that the worst of the 2008 financial crisis might be in the rearview mirror.

A quick look at a chart will show that since the Dow bottomed at 6,547.05 on March 9, 2009, at the height of the U.S. credit crisis, it has climbed nearly 8,000 points, or some 122 percent to forge a new record-high closing of 14,539.14 last week on March 14, roughly four years later.

Don't forget to check IndexUniverse.com's ETF Data section.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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