"The recession is pretty much behind us, so the market is seeking out companies with good prospects for the next year or two," said Howard Kornblue, managing director of value funds for ING Funds, which oversees $35 billion.

The S&P 500 rose 18.63, or 1.6 percent, to 1164.77 and has advanced 5.3 percent in the past four days. The Dow Jones Industrial Average gained 161.72, or 1.6 percent, to 10,595.13. The Nasdaq Composite Index climbed 24.17, or 1.3 percent, to 1890.46.

A new bull market for stocks has begun, according to Ned Davis Research Inc., a Venice, Fla.-based research firm. The Dow has gained 29 percent in the more than 155 days since its Sept. 21 low, meeting the firm's criteria for a bull market.

Still, the index's advance during that stretch is the fourth shallowest and shortest of the 33 bull markets on record, Ned Davis said.

"If substantial improvement does occur in expected and actual earnings, the market's upside potential will rise accordingly," strategist Tim Hayes said in the report. "For now, the odds favor a shallow bull market."

More than 1.2 billion shares traded on the New York Stock Exchange by 3:15 p.m. New York time, up 8.9 percent from a week ago. Two stocks rose for every one that fell on the Big Board.

Companies whose business benefits most as the economy grows gained. General Electric, the largest company by market value, rose 99 cents to $41.49. Emerson Electric Co. climbed $2.35 to $63.86.

Tyco International Ltd. rose $1.95 to $34.17 on speculation its plastics unit may fetch as much as $3 billion in an auction. Kohlberg Kravis & Roberts Co. and Madison Dearborn Partners Inc. are among private equity firms that plan to bid for the division, according to people familiar with the situation.

Among financial shares, Citigroup, parent of Citibank and brokerage Salomon Smith Barney Inc., advanced $1.35 to $49.05, and Morgan Stanley Dean Witter & Co., the second-largest securities firm, gained $1.57 to $56.55.

Sprint, the third-largest long-distance carrier, advanced $1.23 to $15.92, while shares of its PCS wireless group surged $1.97 to $11.52, the biggest gain in the S&P 500. Sprint said its mobile-phone unit will add as many as 750,000 customers this quarter, helping ease concerns about slowing growth.

Nextel Communications Inc., the fifth-biggest U.S. wireless service provider, advanced 81 cents to $6.20 and AT&T Wireless Services Inc. rose 68 cents to $9.22. Wireless services stocks have posted the widest declines in the S&P 500 this year, with the group falling 44 percent.

The Amex Airline Index rose 4.7 percent to its highest level since the Sept. 11 terrorist attacks. All 10 members advanced.

Northwest jumped $1.13 to $18.93, Delta Air Lines Inc. rallied $1.26 to $36.91 and AMR Corp., parent of American Airlines, climbed $1.03 to $28.38. Passenger traffic declined 10.6 percent last month from a year earlier at the major U.S. carriers.

Boeing Co., the largest commercial aircraft maker, rose $1.27 to $49.48.

High valuations could limit or undo recent gains for benchmark indexes, some analysts and investors said.