News that spending rose 0.5 percent in September — reversing a 0.5 percent August decline — came as another sign of the economy's resilience following hurricanes Katrina and Rita. Last week, the Commerce Department reported better-than-expected gross domestic product growth for the July-September quarter.

While the upbeat spending data bolstered the retail and technology sectors, Steven Goldman, chief market strategist at Weeden & Co., also linked today's rally to a broad recovery from last week's lows and typical end-of-the-month trading as hedge and mutual funds try to boost returns. He also cited strong gains in the European markets.

"Basically we had market sentiment get a bit too one-sided," Goldman said about recent volatility on Wall Street. "Stocks were getting in place to rebound."

According to preliminary calculations, the Dow Jones industrial average rose 37.30, or 0.36 percent, to 10,440.07. The previous session, the Dow climbed almost 173 points, its biggest one-day leap since late April.

Broader stock indicators were also higher. The Standard & Poor's 500 index was up 8.60, or 0.72 percent, at 1,207.01, and the Nasdaq composite index surged 30.42, or 1.46 percent, to 2,120.30.