Although a barrel of light crude oil closed at $41.94, up 48 cents, on the New York Mercantile Exchange, Wall Street appeared unconcerned. Oil futures had vacillated between $41 and $42 per barrel after the Energy Department said fuel inventories were higher than Wall Street expected.

Investors were encouraged as the dollar gained against the yen after Japan's government reported slower-than-expected economic growth in its most recent quarter. Analysts had been concerned that the weak dollar could lead to a drop in foreign investment.

Analysts said investors were more interested in end-of-the-year window dressing in their portfolios.

"There's just a ton of money coming into the market, and some of the usual year-end shuffling, and it's ignoring the day-to-day ups and downs on oil and everything else," said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds. "I think the pullback we had over the past few days is good, because it'll help us move higher before the year's out."

According to preliminary calculations, the Dow Jones industrial average rose 53.65, or 0.51 percent, to 10,494.23. The Dow had fallen more than 150 points over the previous two sessions.

Broader stock indicators were moderately higher. The Standard & Poor's 500 index was up 5.74, or 0.49 percent, at 1,182.81, and the Nasdaq composite index gained 11.45, or 0.54 percent, to 2,126.11.

Analysts reported more money flowing into mutual funds and other investments thanks to the stock rally that started in November. The extra money should push stock prices up before the end of the year.

Despite a disappointing earnings forecast, Merck & Co. made strong gains today. The drug maker warned that its 2005 profits would be lower than analysts expected because of the withdrawal of its Vioxx arthritis drug from the market earlier this year. However, the forecast could have been worse, analysts said, and Merck rose 80 cents to $28.69 as it reaffirmed its 2004 earnings targets.

General Electric, another Dow component, climbed 40 cents to $35.71 after analysts at Lehman Brothers upgraded the company's stock to "overweight" from "equal-weight," citing the potential for earnings growth in 2005.

Texas Instruments Inc. lost 96 cents to $24.05 after it narrowed its 2005 earnings and revenue forecasts, which still fall within Wall Street's estimates, but said 2004 earnings remained on target.