For the month, the Dow climbed 10.6 percent. That marks its largest monthly gain since January 1987 and its best October in two decades. The Standard & Poor's 500 Index rose 8.7 percent, its biggest advance since March 2000.

The rally has provided some relief in a bear market that has erased more than $7.6 trillion of investor wealth since March 2000. Hewlett-Packard Co. and International Business Machines Corp. led the advance in the 30-stock Dow, whose members include seven of the world's 10 biggest companies.

The gains "must make the average investor feel there is some hope out there that we're not going to zero," said Thomas Garcia, head trader at Thornburg Investment Management, which oversees $5.4 billion in Santa Fe, New Mexico.

Today, the Dow closed down 30.38, or 0.4 percent, at 8,397.03, according to preliminary calculations.

The market's broader indicators were mixed. The Nasdaq composite index rose 2.98, or 0.2 percent, to 1,329.71. The Standard & Poor's 500 index fell 4.95, or 0.6 percent, to 885.76.

While stocks struggled today, analysts said investors are still feeling upbeat after the market's three-week rally on better-than-expected earnings news and have growing hopes the bear market was over.

"What is important to remember is that October has frequently been a bear market killer. That is to say, that bear markets have ended in October," said Alan Ackerman, executive vice president at Fahnestock & Co. "It is too early to tell if that is the case" this time.

October's gains failed to lift the market from dreadful lows reached earlier this year. The Dow has a year-to-date loss of 16.2 percent, while the Nasdaq has plunged 31.8 percent and the S&P has slid 22.9 percent.

Much of October's success is owed to third-quarter earnings reports that have been surprisingly strong.

Some investors said the gains may evaporate. Indexes rallied more than 17 percent in July and August before slumping to five- year lows Oct. 9.

"We've done this before," said Jon Brorson, who helps manage $300 billion as head of equities at Northern Trust Corp. in Chicago. "There's a huge question whether it's sustainable. We're very skeptical."

A decline in consumer confidence to a nine-year low and concern over a slowing economy may limit the advance, he said.

"The consumer's a little shaky, the economy's a little shaky, thus earnings are a little shaky," he said. "I've seen this play before, and the ending's ugly."

The current rally began when the Dow and the S&P 500 reached their lowest levels since 1997. At that level, the S&P 500 had lost 49 percent from its March 2000 peak, more than the decline in the 1973-1974 bear market.

This year's decline drove stock prices too low, said Wendell Perkins, who oversees $600 million at Johnson Asset Management in Racine, Wisconsin. His Small Cap Value Fund has averaged a 7 percent annual gain the past three years, compared with the S&P 500's 12 percent average drop, according to Bloomberg data.

He pointed to Jakks Pacific Inc., a toymaker that trades at less than its book value, even after a 30 percent gain from Oct. 9. "There's nothing wrong with that company," he said. "It's not on its way out of business."

"You would not find normal, healthy companies trading at half of book value in any market in the last 30 years," Perkins said. "But you see that today."

Some investors said speculation that the Federal Reserve may lower interest rates this year is giving stocks an added boost. Benchmark lending rates are at the lowest level in four decades at 1.75 percent.

Federal funds futures contracts, which gauge the average overnight rate in a particular month, show traders see an 85 percent chance of a quarter-point cut next week. The odds, up from 21 percent early last week, are based on the November contract's 1.58 percent yield.

"There's a growing belief the Fed will cut rates," said Perkins. "That should be a positive for stocks."

Today's market was mixed in part because the economic news was somewhat disappointing and gave investors reasons to be cautious. The Commerce Department report that the U.S. economy grew at a 3.1 percent annual rate in the summer, while brisk, was short of the 3.6 percent clip that analysts had expected.

And the Purchasing Management Association of Chicago reported that its index of business activity fell to 45.9 in October. It was the second straight month with a reading below 50, which indicates contraction in the economy.

The index is considered a harbinger of the Institute for Supply Management's national survey on manufacturing, due to be released Friday.

Among today's losers, ChevronTexaco dropped $3.77 to $67.63 on third-quarter earnings that missed analysts' expectations by 12 cents a share.

Goodyear Tire fell $1.01 to $7.10 after J.P. Morgan warned about the company's outlook. And Standard & Poor's placed the company on a credit watch due to concern over its financial performance compared with expectations.

But data storage company EDS climbed $1.31 to $15.06 after reporting earnings of 18 cents a share, which beat the company's own scaled-back expectation for a gain of 12 cents to 15 cents a share, but was well short of year-ago results. EDS also announced it would cut 1,000 jobs.

And Clorox climbed $3.47 to $44.93 after Goldman Sachs raised its rating to "recommended list" from "market outperform."

The Russell 2000 index, the barometer of smaller company stocks, fell 0.68, or 0.2 percent, to 373.49.

Advancing issues narrowly outnumbered decliners 7 to 6 on the New York Stock Exchange, where volume was light.

In Europe, France's CAC-40 rose 2.1, Britain's FTSE 100 gained 0.9 percent, and Germany's DAX advanced 1.3 percent.