Analysts attributed at least some of the day's trading to bargain hunting, as October winds to a close, marking the end of the fiscal year for many mutual funds — a time when managers reposition themselves and make new bets. This was reflected in improved performance in some beaten down sectors, including financials, health care and pharmaceuticals.

"I would say half of it is relief over the insurance stocks and the other half is end-of-October bargain hunting. People want to sell their losers and ride the winners," said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds. "Then on the other side, there are people not wanting to make any decisions ahead of the election."

According to preliminary results, the Dow Jones industrial average gained 138.49, or 1.42 percent, to 9,888.48.

Broader stock indicators were also higher. The Standard & Poor's 500 index was up 16.30, or 1.49 percent, at 1,111.10. The Nasdaq composite index added 14.75, or 0.77 percent, to 1,928.79.

Worries about job prospects drove consumer confidence lower for a third consecutive month, according to the latest reading by the Conference Board. The 3.9-point slide in the group's Consumer Confidence Index was steeper than expected, bringing the reading to 92.8; analysts had expected a 94. The drop raised questions about how robust spending is likely to be during the critical holiday shopping season.

Uncomfortably high energy prices are another potential pressure on consumer spending, and there was little relief in sight today. Light, sweet crude futures settled 63 cents higher at $55.17 on the New York Mercantile Exchange.

"Pick your uncertainty. You have oil. You have elections. We need to pop some of these bubbles of uncertainty before we can go anywhere," said Bill Groenveld, head trader for vFinance Investments. "But look at how we've held in despite all this stuff. We got a strong market once you move these things out of the way."

The insurance sector got a boost after Marsh & McLennan replaced its chief executive and announced a series of reforms in hopes of appeasing New York Attorney General Eliot Spitzer, who is in the midst of a bid-rigging investigation of the company.