The surge in stocks — the Dow Jones industrial average added more than 140 points and the Nasdaq composite index was up almost 2 percent — was accompanied by a spike in volume as investors returned to the market in large numbers following two days of congressional testimony from Federal Reserve Chairman Alan Greenspan.

Nervousness about when the Fed will raise rates has overshadowed good results throughout the current reporting period. Analysts say those worries may be overblown, however, as most doubt that lifting rates from their current 45-year lows would significantly dent future corporate profits.

"I don't think we're at the point where interest rates are going to curtail the market's advance, but the market has to go through a digestive phase," said Steven Goldman, chief strategist at Weeden & Co. in Greenwich, Conn.

The Dow closed up 143.93, or 1.4 percent, at 10,461.20.

The broader gauges were also markedly higher. The Nasdaq gained 37.28 or 1.9 percent, to 2,032.91. The Standard & Poor's 500 index rose 15.84, or 1.4 percent, to 1,139.93.

Greenspan's message to Congress — that the economic recovery is stable and the expansion will likely continue — sounded positive but carried a painful implication for the market, as many investors interpreted it as confirmation that rates likely will rise before the year is out.

Skittish investors had only to look to the day's earnings for positive signals. Solid results from business-to-business shipper UPS and industrial equipment specialist Caterpillar bode well for the economy.

Reports from dozens of companies, including more than 70 listed on the S&P 500 and five Dow components, made yesterday one of the busiest days of the earnings season.

Among the best gainers on the Dow, Caterpillar soared $3.39, or 4.2 percent, to $84.10, after more than tripling its earnings and surpassing analysts' estimates. The world's largest manufacturer of construction equipment also raised its outlook for the year.

American International Group Inc., just added to the Dow this month, rose 50 cents to $73.70 after beating expectations, despite concerns that rising rates might hurt the financial sector.

UPS added 74 cents to $71.94 on earnings powered by international growth, especially in China. The world's largest shipping company also issued a bright outlook, especially for its business interests in Asia.

Merck & Co. was up 24 cents at $46.74 after the pharmaceutical company reported a 5 percent decline in first-quarter profits, partly because of the sale of Medco Health Solutions, its pharmacy benefit management firm. Excluding the lost income from Medco, Merck said its profits were up 5 percent.

Decliners included AT&T Corp., which shed 56 cents to $18.03 despite beating analyst expectations. The nation's largest long-distance phone company, which recently lost its seat on the Dow, saw a 47 percent dive in quarterly profits.

Advancing issues outnumbered decliners more than 3 to 1 on the New York Stock Exchange. Consolidated volume was heavy, with 2.25 billion shares traded, compared to 2.17 billion shares on Wednesday.