"We’ve found a good support zone and we’re just getting a little bounce," said Stephen Sachs, director of trading for Rydex Investments. "In the near-term, perhaps over the next week or so, we’ll probably trade higher. But I don’t expect that to last too long."

The gains marked the first time all three major indexes posted two straight positive days since Feb. 10-11, but they remain in negative territory for the year.

According to preliminary calculations, the Dow Jones industrial average rose 115.63, or 1.1 percent, to 10,300.30, building on yesterday’s 81.78 gain.

The other major indexes were also sharply higher. The Standard & Poor’s 500 index climbed 13.08, or 1.2 percent, to 1,123.78, and the Nasdaq composite index was up 33.67, or 1.7 percent, at 1,976.76.

The Consumer Price Index, a key indicator of inflation, rose by only 0.3 percent in February, a drop from the 0.5 percent rise posted in January. Without a major hike in the CPI, it is likely the Federal Reserve, which kept rates unchanged yesterday, will maintain that policy, possibly through the rest of the year, analysts said.

Analysts said the market was soothed by the stability of inflation and interest rates, but the advance was perhaps fed more by a natural bounce-back after weeks of selling that accelerated last week. Before yesterday, the Dow had lost nearly 635 points, or nearly 6 percent after reaching a 2004 peak of 10,737.70 on Feb. 17.

"I think we were a little bit oversold over the past week," said Todd Leone, managing director of equity trading at SG Cowen Securities. "But you’ve got inflation under control, the Fed came out with its statement and the market is responding positively."

The continued low interest rates were expected to help both the construction and financial sectors. The Mortgage Bankers Association index of mortgage applications jumped 25.6 percent last week, hitting its highest level since mid-July. Purchase applications were up a modest 5.6 percent, but the number of applicants seeking refinancing surged 39.7 percent.

The merger wave moved to the technology sector as Fisher Scientific International Inc. announced it would buy Apogent Technologies Inc. for $3.7 billion in stock.

Both companies make scientific and laboratory equipment. Fisher was down 22 cents at $52.10, while Apogent rose $1.07 to $28.85.