Analysts said investors, still wary after two years of bear markets, remained hesitant about making many big moves.

The Dow closed up 74.83, or 0.9 percent, at 8,818.14, according to preliminary calculations, for a two-day advance of 335.75. It was the average's highest close since July 9, when it stood at 9,096.09.

Broader stock indicators also rose. The Standard & Poor's 500 index advanced 10.62, or 1.2 percent, to 930.24, while the Nasdaq composite index gained 10.63, or 0.8 percent, to 1,344.93.

The advance came a day after a sizable rally on news that most of the nation's largest companies had complied with the Securities and Exchange Commission order to certify their financial statements.

Analysts said investors had been reassured by the relative ease of the process, but they were hesitant to ascribe too much to the market's two-day winning streak. They said that although investor sentiment has improved from a few months ago when it seemed like there was a new corporate scandal every day, market conditions remain fragile.

"There is still a very reasonable negative case to be made against equities starting with valuation, continuing on to the risk of a prolonged period of economic softness and the risk that we may even be heading into a deflationary period of time that's typically corrosive to profits," said Charles G. Crane, strategist for Victory SBSF Capital Management.

Indeed, the Labor Department reported today new claims for jobless benefits rose last week by a seasonally adjusted 6,000 to 388,000, a bigger-than-expected gain. Economists expect the jobless rate to move higher later this year as cautious employers put off new hires.

A Federal Reserve study found that the nation's industrial sector lagged in July, with production increasing by 0.2 percent ­ a slowdown from the brisk 0.7 percent increase posted in June.

A regional survey of Philadelphia from the Federal Reserve further discouraged investors, because it showed a significant drop-off in spending and manufacturing activity.

"There's little doubt there is economic weakness," said Barry Hyman, chief investment strategist at Ehrenkrantz King Nussbaum. "The only unknown is if this is going to turn into a double-dip recession. There's no answer to that yet."

Still, investors felt confident enough about the market's prospects to do some selective buying.

Target advanced $2.93, or 9.1 percent, to $35.10 on a 27 percent increase in second-quarter earnings. Nordstrom surged $2.18, or 11.8 percent, to $20.62 on better-than-expected quarterly results.

Brocade Communications was also higher, climbing 91 cents to $15.96, after reporting growth in quarterly profits and sales and expressing confidence about the current quarter.

AOL Time Warner advanced 81 cents to $11.86 despite the media conglomerate's announcement late yesterday that there may be problems with the way its America Online unit recognized revenues from at least three transactions.

And UAL Corp., the parent of United Airlines, rose 25 cents to $2.70 despite a warning that a bankruptcy filing later this year might be possible.

Advancing issues led decliners more than 2 to 1 on the New York Stock Exchange. Volume came to 1.5 billion shares, compared with 1.51 billion yesterday.

The Russell 2000 index rose 1.32 to 390.73.