Acquisitions in the technology and pharmaceutical industries promised to reinvigorate those lagging sectors. Google Inc., Seagate Technologies and IBM Corp. all announced major purchases, while Allergan Inc. said it will buy Inamed Corp.

And while final third-quarter GDP was lower than anticipated, with the economy growing at an annualized rate of 4.1 percent instead of the expected 4.3 percent, investors welcomed the news as another sign that the Federal Reserve would be hard pressed to continue raising interest rates. The 4.1 percent growth rate was still considered strong.

The market's spark bodes well for a sustained rise through the last few trading days of the year, though analysts did not expect major gains before year's end.

"We're definitely picking up some momentum going into year's end, but that's not really translating into any sense of urgency," said Hugh Johnson, chairman and chief investment officer at Johnson Illington Advisors in Albany, N.Y. "People are content to hold on to some cash and not be fully invested."

In late afternoon trading, the Dow Jones industrial average rose 16.65, or 0.15 percent, to 10,822.20. The Dow had been more than 94 points higher earlier in the session.

Broader stock indicators also moved higher. The Standard & Poor's 500 index climbed 1.08, or 0.09 percent, to 1,260.70, while the Nasdaq composite index added 2.98, or 0.13 percent, to 2,225.40.

Bonds continued the previous session's selloff, with the yield on the 10-year Treasury note rising to 4.49 percent from 4.47 percent late yesterday. The dollar rose against most major currencies, while gold prices fell.

Crude oil futures were little changed after the Energy Department reported a slight rise in the nation's crude oil stockpiles. A barrel of light crude was quoted at $58.35, up 26 cents, on the New York Mercantile Exchange.

With just six trading days to go before year's end, 2005 will likely end with modest gains, as opposed to 2004's strong year-end rally. However, that could make early 2006 a little better.

"We sold off pretty heavily in January coming off last year's rally, and I don't think we'll see as much of that in 2006," said Joseph Battipaglia, chief investment officer at Ryan Beck & Co. "This year's start could be a little more bullish, and you still have lots of companies sitting on a lot of cash that can be put to use in 2006."

The acquisitions fueled plenty of trading activity today. Google fell $4.59 to $425.15 after winning the bidding war for a piece of Time Warner Inc.'s America Online division, paying $1 billion for a 5 percent stake. Time Warner lost 9 cents to $17.65, while Microsoft Corp., which had hoped to edge out its online rival for the stake, slipped 13 cents to $26.73.

Computer hard-drive maker Seagate said it will pay $1.9 billion in stock for rival Maxtor Corp., hoping the combined company will be able to reduce costs while gaining market share. Seagate climbed 41 cents to $20.01, while Maxtor, which is valued at $7.25 per share in the deal, soared $2.32, or 51 percent, to $6.84.

Dow industrial IBM added 50 cents to $82.98 after announcing the purchase of Micromuse Inc., which makes software to manage video and voice traffic on computer networks, for $865 million in cash, or $10 per share. Micromuse surged $2.60, or 36 percent, to $9.81.

In the pharmaceutical sector, Inamed climbed 87 cents to $86.63 after Allergan, best known for its Botox skin treatment, agreed to pay up to $3 billion for the medical device maker. Inamed shareholders can opt for $84 per share in cash or a stock swap. Allergan gained 8 cents to $106.68.

Rising demand led FedEx Corp. to easily surpass Wall Street forecasts for its quarterly profits. Second-quarter earnings at the shipping company rose 33 percent, beating analysts expectations by 13 cents per share. FedEx, which also raised its full-year earnings forecasts, added $4.93, or 5 percent, to $103.42.

Shares of sporting goods maker Nike Inc. tumbled $2.97, or 3.4 percent, to $85.51 after the company posted a 15 percent increase in quarterly profits, but warned that future orders were lagging. The company beat quarterly profit projections by 11 cents per share.

Advancing issues outnumbered decliners by nearly 2 to 1 on the New York Stock Exchange, where volume came to 1.15 billion shares, compared to 1.11 billion traded at the same point yesterday.

The Russell 2000 index of smaller companies rose 3.82, or 0.57 percent, to 676.60.

Overseas, Japan's Nikkei stock average surged 2.02 percent. In Europe, Britain's FTSE 100 closed up 0.71 percent, France's CAC-40 gained 1.04 percent for the session, and Germany's DAX index rose 0.76 percent in late trading.