Analysts said the absence of any significant negative news, such as accounting restatements, added to the good mood on Wall Street, which has seen two straight weeks of gains among the three major indexes.

"The path of least resistance is always higher," said Richard E. Cripps, chief market strategist for Legg Mason of Baltimore.

The Dow closed up 212.87, or 2.4 percent, at 8,990.83, according to preliminary calculations. The gain followed a 0.4 percent advance last week; the Dow has now recovered about 1,500 points since it hit an intraday low of 7,489.53 on July 24.

The last time the Dow closed above 9,000 was nearly six weeks ago, on July 9.

The broader market also closed higher. The Nasdaq composite index was up 33.67, or 2.5 percent, at 1,394.68, having surged 4.2 percent last week. This was the Nasdaq's best finish in a month, having closed on July 17 at 1,397.25.

The Standard & Poor's 500 index rose 21.97, or 2.4 percent, at 950.74, following a weekly gain of 2.2 percent.

The Conference Board reported that its Index of Leading Economic Indicators, an important gauge of U.S. economic activity, fell 0.4 percent to 111.7 in July, slightly beating analysts' expectation of a decline of 0.5 percent.

July's figure represents the second straight monthly decline in the index, following a revised 0.2 percent drop in June.

The better-than-expected report prompted investors to continue their buying from last week. The three major indexes rose for the second straight week last week, a feat not seen in five months, buoyed by greater Wall Street confidence after hundreds of companies vouched for their financial statements by the Aug. 14 deadline.

Still, analysts said investors' optimism remains fragile, particularly after the Federal Reserve last week left interest rates unchanged but left the door open for future cuts, citing risks of a softening economy.

Advancing issues led decliners nearly 2 to 1 on the New York Stock Exchange. Volume was light.

The Russell 2000 index, the barometer of smaller company stocks, rose 5.32, or 1.4 percent, to 401.29.