The stock market is pushing towards its all-time high

BBC News looks at why this has happened and asks what the prospects are for an early climb back to its record high of 6,950, set in December 1999.

Why has the market rallied now?

This year has seen a lot of fizz in the stock market, thanks largely to a frenzy of merger and acquisition activity and a batch of strong company earnings reports.

Investors have also been drawn to the markets by the promise of capital returns from higher dividends or share buybacks.

The ongoing strength of oil prices has fuelled market heavyweights such as Shell and BP, while major mining stocks including BHP Billiton and Xstrata have had their market values boosted by strong commodity prices as emerging economies, led by China, feed an increasing hunger for raw materials.

Additionally, Friday sees the "triple witching" effect of the quarterly expirations of futures and options, which increases market activity.

Why does hitting the 6,000 level matter?

Stock markets are driven on sentiment and the 6,000 level is seen as a major psychological barrier.

Breaching this mark may give investors more encouragement to buy more shares and drive the market back towards its all-time high of 6,950.

If that happens the stock market will have finally recovered from the impacts of the dotcom bubble burst in 2000 and the devastating events of September 11, 2001.

What have companies learnt in the past five years?

The last time the market stood above 6,000 was in March 2001, when many firms were still overweight and in need of cost cutting and restructuring.

Since then many listed companies have undergone major restructuring as the global slowdown triggered by September 11 forced firms to tighten their belts.

This has left them leaner and meaner, with more of their revenues going straight on the bottom line as profit.

Higher profits mean better dividends and a greater incentive for shareholders to invest.

Additionally, these efficiencies have left companies with bulging war chests that can be used to snap up rivals or return to shareholders as dividends.

So where do we go next?

Onwards and upwards, it is hoped.

Many analysts are in agreement that the market still looks relatively cheap and is quite capable of adding another 500 points.

However, this is dependent on factors such as oil prices and future earnings.

Oil and commodity prices look set to remain high for now as global demand steadily increases, while the beleaguered retail sector could see a turnaround if a bullish stock market translates into another boom in consumer spending.

Meanwhile, interest rates are steady and are seen as having hit a ceiling at 4.5%.