Not only is the deficit shrinking, but the economy is doing pretty well.
Wall Street extended its record-setting advance Monday, sending the Dow Jones industrial average within a whisper of 12,000 as investors grew more optimistic that corporate profits will remain robust amid a slowing economy.
The Dow closed up 20.09, or 0.17 percent, at 11,980.60. In the final hour of trading, the index reached a record trading high of 11,997.25.
Broader stock indicators also advanced. The Standard & Poor's 500 index rose 3.43, or 0.25 percent, to 1,369.05, and the Nasdaq composite index rose 6.55, or 0.28 percent, to 2,363.84.
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Bonds rose, with the yield on the benchmark 10-year Treasury note dipping to 4.78 percent from 4.80 percent Friday. The dollar was mixed against other major currencies, while gold prices rose.
The blue chip index was less than 3 points away from reaching the milestone for the first time, then fell back minutes before the close; it still managed a record high finish, its seventh in two weeks. A deluge of earnings reports, including 12 from Dow component companies slated this week, could make or break the Dow's three-week run at record levels.
