The S&P 500, the benchmark measure of U.S. shares, closed at a 32-month high of 1,343.01 on Feb. 18. It has almost doubled since March 2009 and risen three straight weeks as corporate profits surpassed Wall Street estimates for eight straight quarters, sending the S&P 500's valuation to an eight-month high of 16 times reported income.

Last week, the MSCI World rose 1.6%. The MSCI Emerging Markets Index of 21 countries gained 2.8%.

Greece, Italy and Spain are leading developed markets higher with gains exceeding 9.6% this year. Stocks in the nations, among Europe's most indebted, rebounded from the worst performances in 2010 amid growing confidence France and Germany will keep the region's currency intact. The euro has risen versus 13 of 16 major counterparts this year, including Brazil's real and South Africa's rand, after trailing 15 in 2010.

U.S. Mutual Funds

Investors are pouring money into equity mutual funds that buy shares in the U.S., the world's largest stock market, with shares valued at $16.6 trillion. Domestic equity funds had net inflows of $4.92 billion during the week that ended Feb. 9, more than any time in almost two years, according to data from Investment Company Institute, a Washington-based trade group. Non-U.S. stocks attracted $928 million.

"In an ideal portfolio, we'd pick our biggest overweight in the developed world," Manpreet Gill, a Singapore-based strategist at Barclays Wealth, which oversees about $225 billion, said in a Bloomberg Television interview on Feb. 15. "That's where we're seeing a lot of the economic surprise."

Developed nations, recovering from the worst financial crisis since the Great Depression, have kept interest rates low, with the Fed holding its target near zero since December 2008.

Interest-rate derivatives show traders anticipate U.S. economic growth won't spark runaway price gains. Forward contracts on 10-year interest-rate swaps that allow investors to lock in fixed-rate payments for 10 years a decade from now have risen to 5.38%, or where they were before the financial crisis began in 2008.

German Reunification

While countries sharing the euro have exceeded the European Central Bank's inflation limit, policy makers have kept their benchmark rate at a record low of 1% for almost two years as they apply one monetary policy to 17 nations. Germany's economy grew 3.6% last year, the most since reunification two decades ago. Greece contracted 4.5% and Spain's economy declined 0.2%.