Wall Street's rally got back on track over the past week as the market survived a scare on corporate earnings and investors appeared confident about the US economic expansion.
The Dow Jones Industrial Average jumped 2.2 percent to 10,907,21 in the week to Friday, recouping most of the losses in the prior week's rout.
The tech-heavy NASDAQ composite climbed 2.5 percent to 2,304.23 and the Standard & Poor's 500 broad-market index advanced 1.76 percent to 1,283.72.
This month's rally appeared to be back in gear after a scare over some of the early-season earnings reports and other concerns that led to a sharp selloff on Jan. 20.
"What a difference a week makes," said Al Goldman at AG Edwards, who added that the big sell-off from a week earlier "appears long-forgotten."
"Action was impressive in the face of the continuing uncertainty in Iran, higher oil prices, and the Palestinian election results," Goldman said.
Surprisingly, the market extended its rally after news that US economic growth slowed sharply to a 1.1 percent pace in the fourth quarter of last year.
Most market participants said the cooler growth figure was an anomaly, and that even if the economy was slowing that might lead to a more favorable policy on interest rates from the US Federal Reserve.
The Fed will be in focus as Chairman Alan Greenspan leads his last meeting, expected to hike rates by a quarter point, and then turns over the job to Ben Bernanke. But financial markets appeared to have confidence in Bernanke's ability to keep the economy on track.
The market looks for steady economic growth with inflation in check that may allow the Fed to pause after one or two additional quarter-point rate hikes to the federal funds rate, currently at 4.25 percent.
"Look for the Fed to continue to express its optimism about the economy's growth prospects while suggesting that inflation remains the larger risk," Bank of America chief economist Lynn Reaser said.
"Given what we know today and our outlook over the near term, it seems likely that the Fed will come out of its March meeting with a 4.75 percent fed funds target that will hold through the balance of 2006," Reaser said.
Other analysts worry that a number of events could derail the US economy and the market.
"The persistent increase in oil prices is worrying me again," said Jeremy Siegel, a University of Pennsylvania economist who advises Nuveen Investments.
"We have yet to feel the full impact of rising oil prices. We emerged from the last oil surge in far better shape than expected, but that increase was due to seemingly temporary disruptions caused by Hurricane Katrina. The current surge is due to more persistent factors," he said.
The market will watch the Fed transition in the coming week along with earnings from companies including Kodak, ExxonMobil and Google, and will see a snapshot of the labor market with the nonfarm payrolls report for this month.
Bonds fell sharply over the past week. The yield on the 10-year US Treasury bond rose to 4.503 percent from 4.361 percent a week earlier, and that on the 30-year bond rose to 4.680 percent from 4.531 percent. Bond yields and prices move in opposite directions.
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