With few firms issuing profit warnings and some forecasting year-over-year earnings growth as high as 20 percent, analysts expressed confidence that the market would continue its advance.

"There’s reason to be more optimistic than most people were after seeing that crummy jobs figure on Friday," said Philip S. Dow, managing director of equity strategy at Dain Rauscher Wessels in Minneapolis. "Whenever business begins to come back, that’s not a recovery you measure in months, you measure it in years."

According to preliminary results, the Dow Jones industrial average closed up 26.29, or 0.2 percent, at 10,485.18, after gaining 0.5 percent last week.

The broader gauges were also higher. The Nasdaq composite index closed up 24.86, or 1.2 percent, at 2,111.78, after rising 4 percent last week. The Standard & Poor’s 500 index gained 5.37, or 0.5 percent, to 1,127.23, following a weekly gain of 1.2 percent.

The market was still digesting Friday’s employment data from the Labor Department, which said unemployment dropped to a 14-month low of 5.7 percent while payrolls increased by just 1,000 jobs, a sign that many have given up the search for work.

For the most part, though, investors were focused on the strong earnings outlook. But analysts also warned that some of the expected profit gains may already be reflected in stock prices, as companies have anticipated for some time that they would benefit from easy year-over-year comparisons. It may be more difficult for them to best last year’s returns in future quarters, said Neil Massa, equity trader at John Hancock Funds.

"In the short term, there’s no danger earnings will disappoint, it doesn’t look like interest rates will be hiked for a while, so that all bodes well," Massa said. "However, I think we’re definitely in an overbought position, and bound to sell off a little bit. But I think the trend is still upward."

SunTrust Banks Inc. closed down 19 cents at $70.78, despite issuing fourth-quarter earnings that exceeded the expectations of analysts. Other companies expected to report quarterly results this week include Delta Air Lines, General Electric Co., Apple Computer Inc. and Intel Corp.

Adecco SA, the world’s largest employment company, lost $5.23 to close at $11.70 after postponing publication of its audited 2003 results because of unresolved control and compliance issues.

Countrywide Financial Corp. closed down 86 cents at $71.18 after narrowing its outlook for the year and saying it expects quarterly earnings at the lower end of its forecast due to demand for less interest-rate sensitive products.