COEUR d'ALENE - Financial experts in North Idaho showed cautious optimism on Tuesday, after hearing that stock values had been restored to a historic level.

The Dow Jones Industrial Average reached a record-breaking high on Tuesday, hinting that while the economy isn't entirely patched up, businesses are faring better.

It's still not a guarantee that all will be well from here on out, said Joel Bowlby, senior financial consultant at D.A. Davidson and Company in Coeur d'Alene.

"Psychologically it's not a bad thing," Bowlby said of the Dow's new high. "When you see that the market is hitting all-time highs, it gives a kind of confidence. And in this environment, where you've got all the political stuff going on throughout the news, confidence in the economy and confidence in business is important."

Basically giving the temperature for the state of the economy, the Dow is the average value of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ.

The index includes stocks of companies like General Electric, Disney, Exxon and Microsoft.

The Dow closed at 14,253.77 points on Tuesday, eclipsing the prior record of 14,164.53 from Oct. 9, 2007.

The record does not include the impact of inflation.

The average means companies have never been more profitable, Bowlby said.

"At least large companies," he said. "That's why the Dow is hitting an all-time high."

He attributed the companies' success to cost cutting, he said.

And to the fact that the economy is on the mend.

"The housing market is showing signs of life, and the consumer is coming back," Bowlby said.

For instance, more people are taking vacations and making large purchases now, he said.

"The consumer drives most of the economy," Bowlby said.

Alivia Metts, regional economist with the Idaho Department of Labor, believes consumer spending is on the rise because the "shock effect" has subsided from payroll tax cuts and the fiscal cliff uncertainty.

"I think consumers are cautiously optimistic about the outlook for businesses and potentially labor market conditions," Metts stated.

She noted that stock prices have also been boosted by low interest rates, caused by the Federal Reserve's stimulus efforts.

Representatives of other investment firms didn't return messages.

The Dow has risen several thousand points since it bottomed at 6,547.05 on March 9, 2009, according to the Associated Press.

Whether stock values continue to rise is a mystery, Bowlby said.

"Stocks are going to be driven not by how high the Dow hits all the time," he said. "Stocks are driven if businesses continue to grow their business, at the end of the day. If they continue to do so, then absolutely, we'll continue to see more gains."