With only a handful of firms issuing profit warnings and some others 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.

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.

"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," said Neil Massa, equity trader at John Hancock Funds. "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."

Also yesterday, Nasdaq officials announced it will list the shares of six firms that trade on the New York Stock Exchange, including Hewlett-Packard Co., Charles Schwab Corp. and Walgreen Co., under a new dual-listing program.