Wall Street was mired in a narrow trading range until midafternoon, when the Fed released its Beige Book, a survey of the business climate around the country. The central bank said the job market improved and that inflation, a concern for the Fed and the stock market, was fairly contained. Seven out of 12 districts reported their regional economies were growing or holding steady.

"It's a more benign take than previous Beige Books," said Robert Tipp, chief investment strategist for Prudential Investment Management fixed income. "It will presumably open their eyes (the Fed's) to the fact that the economy could be cooling ... and they won't have to continue raising rates more than another two or three moves."

The day's other economic data were also strong: New home sales set a record in June and factory orders for big-ticket manufactured products rose at a strong clip. Analysts said investors were hearing the good economic news that they've been hoping for.

"The economic slowdown that was supposed to be happening at this time of year isn't happening," said Jack Caffrey, equities strategist at J.P. Morgan Private Bank.

Meanwhile, corporate earnings remained upbeat, with more companies surpassing expectations than missing them. The latest positive surprises came from Boeing Co. and Amazon.com Inc., whose stocks shot up after they reported earnings.

The Dow Jones industrial average rose 57.32, or 0.54 percent, to 10,637.09.

Broader stock indicators also advanced. The Standard & Poor's 500 index rose 5.63, or 0.46 percent, to 1,236.79, reaching another four-year high, and the Nasdaq composite index rose 10.23, or 0.47 percent, to 2,186.22.

Bonds fell, with the yield on the 10-year Treasury note rising to 4.26 percent from 4.23 percent late yesterday. The U.S. dollar was down against other major currencies. Gold prices were higher.

Crude oil futures fell. A barrel of light crude settled at $59.11, down 9 cents, on the New York Mercantile Exchange.

Boeing rose 35 cents to $66.70 after the aerospace firm beat Wall Street earnings expectations and the company boosted its outlook for the year due to expected strength in its core commercial airplane and defense units.

Amazon also beat forecasts when it reported earnings after the close of regular trading yesterday. Amazon, which said its sales rose 26 percent in the second quarter, rose $5.91 to $43.65.

"Looking at the markets now, it seems like six weeks of good news, six weeks of bad news, six weeks of OK news," said Stephen Wood, portfolio strategist at Russell Investment Group. "We've been seesawing for about eight months."

Consumer products company Colgate-Palmolive Co. rose 25 cents to $52 after its second-quarter profit matched analysts' estimates.

Reynolds American Inc., the nation's second-largest cigarette maker, missed analysts' expectations despite a 66 percent increase in second-quarter profit. The cigarette maker also boosted its 2005 earnings guidance to reflect a favorable tax rate. It fell $1.18 to $83.07.

Sun Microsystems rose 2 cents to $3.87 after releasing its earnings late yesterday. The company also announced a contract with General Motors Corp. today.

Maytag Corp., which has already accepted one buyout offer, opened its books to Whirlpool Corp. which has proposed paying even more for its appliance making rival. Whirlpool has offered $18 a share, or about $1.43 billion, for Maytag. Maytag rose 6 cents to $16.91; Whirlpool fell 59 cents to $79.69.

Delta Air Lines Inc. fell 44 cents to $2.95 after its CEO said the company's transformation plan, which includes cutting annual costs by $5 billion by the end of next year, is not enough to save the nation's third-largest airline. Gerald Grinstein said the company is working on an out-of court solution,but faces increasing financial pressure.

Advancing issues led decliners 9 to 7 on the New York Stock Exchange, where preliminary consolidated volume was 1.98 billion shares, up from 1.93 billion shares yesterday.

The Russell 2000 index of smaller companies rose 0.30, or 0.04 percent, to 674.88.

Overseas, Japan's Nikkei stock average rose 0.83 percent. Britain's FTSE 100 edged up 0.14 percent, Germany's DAX index was up 0.24 percent, and France's CAC-40 was up 0.28 percent.