"The market has been very oversold and people have been very pessimistic and we were due for a rally," said Stephen Massocca, president of Pacific Growth Equities. "People had been betting Oracle would warn. When it didn't, it became an excuse for people to buy."

The Dow closed up 108.96, or 1.1 percent, at 9,796.80, according to preliminary calculations, after losing 237 points over Monday and yesterday.

Broader stock measures also rose, particularly the Nasdaq composite index, which soared 17.13, or 1.1 percent, to 1,595.25. The Standard & Poor's 500 index rose 9.21, or 0.9 percent, to 1,049.90.

It was the first session all three indicators closed higher since May 23, and followed what has been a difficult period for the markets. On Monday, the Dow fell to levels last seen in early February, while the Nasdaq recorded its lowest close since Oct. 2.

The day started on a quieter note. Wal-Mart reported stronger-than-expected May sales and Avon reaffirmed its forecast, but the news failed to spark a broad rally. Although blue chips trended higher for much of the session, technology didn't catch up until the Oracle announcement.

In trading today, Wal-Mart rose 96 cents to $54.96, while Avon surged $2.69, or 5.2 percent, to $54.64.

Although many analysts expect that May retail sales overall will be disappointing, the buying still spread to other retailers. The Gap rose 63 cents to $15.18 after Prudential Securities upgraded the stock.

Financial issues also advanced. American Express gained 92 cents to $41.01.

Technology stocks got a boost from Oracle, which gained 84 cents, or 10 percent, to $8.66.

Microsoft rose $1.68 to $51.66. And Intel jumped 68 cents to $28.18, despite spending much of the session at a loss. Intel is scheduled to release a midquarter update tomorrow. The stock is considered an indicator of where the broader tech sector is headed, and Oracle's announcement might have allayed investors' fears that Intel's news would be terrible.

Philip Morris dropped 36 cents to $57.36 after the Oregon Court of Appeals reinstated a $79.5 million punitive damage award against the tobacco maker in a lawsuit that alleged the company knew of the harm of smoking and concealed the facts.

The market was pleased by Oracle's announcement because few companies have felt confident enough to forecast solid business ahead. Earnings reports due out next month could alleviate or intensify Wall Street's concerns about the pace of a recovery.

Investors are also uneasy because of the number of companies, including Microsoft and Halliburton, that have faced questions about or made changes to their accounting practices because of government scrutiny.

Finally, the political crises overseas, whether in the Middle East or in India and Pakistan, have given investors yet another reason to stay away.