Although investors were interested in picking up cheaper stocks following two weeks of selling on concerns about earnings, stocks fluctuated throughout the session and trading volume was light.

The market's indecisiveness was clear as stocks kept reversing direction ­ falling after the government announced it was raising the nation's terror alert level to orange, signifying high risk of attacks, and then rising after a House committee said it was referring its investigation of Martha Stewart to the Justice Department.

"We have a reasonably fragile trading arena with no strong conviction. The challenge ahead is for the market to wade through the anniversary of Sept. 11," said Alan Ackerman, executive vice president of Fahnestock & Co. "The market just seems to have a mind of its own."

The Dow Jones industrial average closed up 83.23, or 1 percent, at 8,602.61, according to preliminary calculations. The Dow recovered from an earlier loss of 17 points to score a three-day, 318-point winning streak.

It was the Dow's largest advance since Aug. 6-9 when it gained 701.82, recovering from its July 23 low of 7,702.34.

The market's broader gauges were also higher. The Nasdaq composite index rose 15.49, or 1.7 percent, to 1,320.09, for a three-day advance of 69.

The Standard & Poor's 500 index advanced 6.62, or 0.7 percent, to 909.58, for a three-day gain of 30.

Analysts are wary of reading too much into this week, which is light on economic and earnings news and high on emotion as the nation marks the one-year anniversary of the Sept. 11 attacks.

"You probably have some hesitation about tomorrow. And, there's the notion that we are going to have a little time out for the next few days as the nation considers what we have been through for the past year," said Kevin Caron, market strategist at Ryan, Beck & Co. LLC.

The market was obviously nervous about the possibility of an attack around the anniversary. News that the government was raising its terror alert to the second-highest level sent prices lower at midday, and while prices recovered soon after, they fell again as Attorney General John Ashcroft held a news conference to discuss the alert.

Yet prices kicked upward as the House Energy and Commerce Committee said it was turning over information it had gathered in its investigation of Martha Stewart's stock trades to the Justice Department. While analysts downplayed the significance of the market's move, investors have tended to buy in recent months on developments in corporate ethics cases.

But Martha Stewart Omnimedia climbed $1.30 to $9.05 following the news. And Imclone Systems, the company whose shares Stewart is accused of selling on insider information, gained 20 cents to $8.20.

Analysts also aren't expecting much, if any, progress on Wall Street this month. After the terror anniversary, companies are due to discuss where third-quarter earnings stand, and negative warnings will pressure stocks.

The New York Times Co. rose 91 cents to $47.81 after confirming its third-quarter outlook and reporting that advertising revenue rose 2 percent in August.

Medtronic advanced 40 cents to $41.90 after the medical device maker said second-quarter revenue will come in at $1.8 billion, the upper end of its forecast.

But H.J. Heinz fell $2.04 to $35.90 after Prudential downgraded the food maker to "hold" from "buy."

Advancing issues narrowly outnumbered decliners 14 to 13 on the New York Stock Exchange where volume was light at 1.15 billion shares, compared with 1.12 billion on Monday.

The Russell 2000 index, which tracks smaller company stocks, rose 1.69, or 0.4 percent, to 394.16.

Overseas, Japan's Nikkei stock average finished today essentially flat, inching up just 0.03 percent. In Europe, France's CAC-40 rose 3.1 percent, Britain's FTSE 100 gained 2.8 percent, and Germany's DAX index advanced 1.9 percent.