"We're going to have this slow torture because nobody on the corporate front is going to stand up and say things look terrific," said Tony Cecin, director of institutional trading at US Bancorp Piper Jaffray, referring to the uneven trading.

The Dow Jones industrial average rose 55.88, or 0.7 percent, to close at 7,920.11, having declined 2.4 percent last week to post its fourth straight losing week.

Earlier in the day, blue-chip stocks were down as much as 62 points.

The broader market also finished moderately higher. The Nasdaq composite index gained 14.22, or 1.1 percent, to 1,296.69, following a weekly loss of 2.9 percent. The Standard & Poor's 500 index rose 6.19, or 0.8 percent, to 835.88, having dropped 3 percent last week.

Iraq's U.N. ambassador, Mohamed al-Douri, said his country sent a letter to the United Nations today allowing U-2 surveillance flights. Iraq also pledged to pass legislation next week outlawing the use of weapons of mass destruction.

In response, White House spokesman Scott McClellan said, "The bottom line is the president is interested in disarmament. This does nothing to change that."

Investors' anxieties about a war with Iraq and terrorism have pressured the market in the past month, leading to steep declines. The Dow and S&P 500 are down about 5 percent for the year, while the Nasdaq has lost 3 percent.

Some investors also were avoiding major commitments as they awaited Federal Chairman Alan Greenspan's comments to Congress about the economy tomorrow and Wednesday, analysts said.

"Right now, it's a low-volume quagmire kind of environment," Cecin said. "No one wants to do anything for fear whatever they do will be wrong. So you've got cash sitting on its hands."

Steven Goldman, chief market strategist at Weeden & Co. in Greenwich, Conn., said investors should expect continued market volatility on the latest developments with Iraq until there is war or peace.