The positive economic data was well-received by Wall Street, a notable change from recent months when the buoyant economy made investors concerned over rising interest rates and the possibility of inflation. But it also calmed a market that only yesterday was worried that the economy might be slowing too much.

Investors were also encouraged by a decline in weekly jobless claims and easing oil prices.

John Lynch, chief market analyst at Evergreen Investments, said interest rate jitters and inflation woes have largely worked their way through the markets, with investors finally focusing on positive fundamentals including strong consumption and business spending.

"The perception of bad stuff has been priced in," Lynch said. "Interest rates, oil prices, yes, they could serve to limit growth. But I think investors are really thinking that this is all priced in. It’s a day of clarity."

According to preliminary calculations, the Dow Jones industrial average was up 95.31, or 0.9 percent, at 10,205.20. The Dow last closed above that level on May 6, and has risen 246.77, or 2.5 percent, since Monday’s close.

The Standard & Poor’s 500 index was up 6.32, or 0.6 percent, at 1,121.26 and the Nasdaq composite index gained 8.35, or 0.4 percent, to 1,984.50. It was the best close for the S&P 500 since April 29, and the best for the Nasdaq since April 28.

Before the market opened, the Commerce Department reported that the economy grew at a

4.4 percent annual rate in the first quarter of this year. The solid growth rate was slightly faster than the 4.2 percent pace first estimated a month ago as well as the 4.1 percent growth rate registered in the final quarter of 2003.

Separately, the Labor Department said new applications for unemployment benefits dropped last week by a seasonally adjusted 3,000 to 344,000. Oil prices also eased, slipping below the $40 per barrel mark, easing another source of recent worry for investors.

The good news, which raised the prospect of another quarter of solid earnings, sent buyers back into the market, though volume remained moderate. The market has been particularly fractious this week after two months of declines; investors have alternated between feeling upbeat about the economy and company profits and worrying that economic growth might be slowing too much.

Commerce Department reports of a decline in durable goods orders and a drop in new home sales set off selling in yesterday’s session.

Today, buying was widespread throughout all sectors of the stock market, with only the American Stock Exchange Oil Index posting losses for the session.