The benchmark US share index crossed the threshold at 1450 GMT, just 20 minutes after the opening bell. It had risen 41 points in that time to hit 10,001.78, but fell back shortly afterwards.

Greg Wood reports: "The US is the motor for the world economy"

Traders on the floor of the New York Stock Exchange cheered and raised their arms in celebration as the milestone was passed.

Some held up both hands with their fingers spread to signify 10 as in 10,000. The celebrations lasted just 30 seconds before traders and clerks returned to work.

Profit-taking set in once the watershed had been reached and the index finished the day 28 points, or 0.28% below its opening level, at 9,931.

Booming economy

The feat follows a decade of steady economic growth and increasing enthusiasm for technology, especially the Internet.

Analysts described the market as "phenomenal"

The US economy has seen remarkably steady growth since the early 1990s. Low inflation and interest rates have kept consumers spending and corporate profits on the up.

Rising technology has also helped US firms improve their productivity and there has been an explosion of enthusiasm for moneymaking on the Internet, with hundreds of companies rushing to put "dot.com" after their names, expecting big payoffs from future sales via the new medium.

Recent hopes that the troubled economies of Asia and Brazil, which have been hit by economic crisis, may be bottoming out, have also boosted market optimism.

"This is a phenomenal market," said Ralph Acampora, director of technical research, Prudential Securities. "It's not the level of 10,000; it's the quality of stocks...GE and Merck and American Express. If we're investing in blue-chip America, it can't be bad.

Slow last lap

The Dow Jones took almost a year to climb the final 1,000 points.

After passing 9,000 on 6 April last year, many wrote off the 1990s bull market last summer as the index plummeted after Russia's economic crisis.

But it rebound sharply following a series of three interest rate cuts by the US central bank, the Federal Reserve.

Reaction to the achievement was mixed. Some analysts said the rise masked an underlying weakness.

"I don't think individual investors should put an emphasis on the Dow 10,000, even though it is historic," said Ron Doran, director of institutional trading at CL King and Associates.

Others said the market was out of control. "This is the biggest bubble out there since the tulip mania of the 17th century," said Charles Allmon, publisher of the newsletter Growth Stock Outlook.

But at least two analysts believe the party is far from over and the market has a long way to go before reaching its ceiling.

"We're in a new bull market. This could be the start of a 'mega-market' lasting 12 to 15 years, similar to the boom markets that followed the First and Second World Wars," said Ralph Acampora, chief technical analyst for Prudential Securities.

Abby Joseph Cohen, Goldman Sachs' widely respected chief market strategist, also said the bull market was "not over".