CORRECTED - Dow sets record highs as rally continues

(Corrects Matthew Lifson's location to Princeton, New Jersey)

By Leah Schnurr

NEW YORK (Reuters) - The Dow rose to record highs on Tuesday, breaking through levels last seen in 2007 as investors extended 2013's rally.

Shortly after the opening bell, the Dow rose above 14,198.10, the intraday all-time high reached in October 2007, when the world was heading toward the financial crisis.

If the Dow ends the day at these levels, it will also set a new record closing high, above 2007's 14,164.53.

Stocks have rallied since the start of the year as investors continue to view equities as more attractively valued than other asset classes. Loose monetary policy around the world has also driven bets on risk assets.

Investors have also poured money into equities in 2013 as signs of economic recovery take hold. The Dow has gained more than 8 percent so far this year, ahead of the S&P 500 and Nasdaq Composite Index.

"The question is, can the Dow maintain these levels?" said Matthew Lifson, currency trader at Cambridge Mercantile Group in Princeton, New Jersey.

"The market is interested in risk - that's why the Dow is higher, why the riskier currencies are higher."

The Dow Jones industrial average rose 96.84 points, or 0.69 percent, to 14,224.66. The Standard & Poor's 500 Index gained 11.70 points, or 0.77 percent, to 1,536.90. The Nasdaq Composite Index climbed 30.70 points, or 0.96 percent, to 3,212.74.

(Editing by Kenneth Barry)