Falling energy prices lent to a brighter economic picture in Katrina's wake, with crude oil sliding despite worries about record-high energy costs this winter and continued refinery shutdowns and gasoline futures slipping below $2 a gallon. Investors also anticipated a burst of activity once reconstruction begins in the Gulf region.

"The market seems to be concentrating on the future rebuilding of the devastated area, and I think that's what's keeping the market from declining," said Peter Cardillo, chief strategist at S.W. Bach & Co.

Revised forecasts from chipmakers Texas Instruments Inc. and Intel Corp. late yesterday bolstered the market with indications that consumer spending remains healthy. Texas Instruments raised its quarterly estimates — fueling hopes for greater electronics demand and calming fears of a spending slowdown — while rival Intel Corp. refined its previous view.

The Dow Jones industrial average climbed 82.63, or 0.78 percent, to 10,678.56.

Broader stock indicators also gained ground. The Standard & Poor's 500 index rose 9.81, or 0.8 percent, to 1,241.48, and the Nasdaq composite index advanced 9.48, or 0.44 percent, to 2,175.51.

Bonds ended higher, with the yield on the 10-year Treasury note sliding to 4.12 percent from 4.14 percent yesterday. The dollar was mixed against most major currencies, while gold prices inched up.

Light trading volume — typical of a late-summer session — persisted on Wall Street, as investors awaited more information about the rising damage toll left by Katrina and searched for any signals that the economic retreat will be less than feared. Nonetheless, falling oil prices led to a strong week for Wall Street. The Dow gained 2.21 percent, the S&P climbed 1.93 percent and the Nasdaq rose 1.61 percent for the week.

Stocks also were helped this week by the growing belief among investors that the Federal Reserve will halt its yearlong string of interest-rate hikes when it meets later this month, in part to contain lending costs for Gulf Coast reconstruction. But one analyst expressed confidence that the Fed will lift the nation's benchmark rate by another quarter point despite concerns about inflation and fallout from the storm.

"Right now, I believe they will raise the rate by 25 basis points. They have been very clear telegraphing what they plan to do," said Paul Cherney of Cherney Market Analysis. "They're going to have to address (Katrina's impact) in some fashion, but they'll probably use plain vanilla, uninspiring wording."

Oil futures traded lower even after the Department of Energy said domestic energy costs this winter would be the highest in 10 years, and that at least four Gulf coast refineries would remain closed for months. A barrel of light crude dropped 41 cents to $64.08 on the New York Mercantile Exchange, where gas futures declined 7.6 cents to $1.96 a gallon.

While Intel said business remains within expectations and narrowed its quarterly revenue target, Texas Instruments lifted both its profit and revenue forecasts, citing greater demand across most of its segments. Texas Instruments was higher through most of today's session, but closed down 3 cents to $33.74. Intel declined 84 cents to $25.25.

Airline stocks fell after Continental Airlines Inc. warned of a "significant loss" for 2005, as soaring fuel costs continue eating into the $300 million the carrier expected to save this year from job and benefits cuts. Northwest Airlines Corp. also plans to lay off two-thirds of its mechanics and ask for $200 million in concessions in its latest proposal to its mechanics union, which has been on strike for three weeks. Continental dropped 49 cents to $12.11, and Northwest was down 4 cents at $3.48.

Boeing Co. is negotiating a settlement with the Justice Department that could require the aircraft maker to pay as much as $500 million to avoid prosecution in two federal probes, The Wall Street Journal said. The deal would resolve allegations that Boeing stole proprietary documents from rival Lockheed Martin Corp., and illegally recruited a senior military official while she still had oversight of Boeing contracts. Boeing jumped 78 cents to $65.40.

Fast-food chain McDonald's Corp. said global sales at its restaurants open at least a year grew 5.7 percent in August, with same-store results 3.2 percent higher in the United States and 3.6 percent in Europe. The company credited new products, extended hours and improved breakfast business. McDonald's added 77 cents to $34.14.

Advancing issues outpaced decliners by more than 11 to 5 on the New York Stock Exchange, where preliminary consolidated volume of 1.98 billion shares topped the 1.95 billion shares traded yesterday.

The Russell 2000 index of smaller companies rose 4.58, or 0.68 percent, to 678.05.

Overseas, Japan's Nikkei stock average rose 1.26 percent. Britain's FTSE 100 climbed 0.35 percent, Germany's DAX index was up 0.26, and France's CAC-40 was higher by 0.58 percent.

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The Dow Jones industrials ended the week up 231.19, or 2.21 percent, finishing at 10,678.56. The S&P 500 index was up 23.46, or 1.93 percent, to close at 1,241.48.

The Nasdaq rose 34.44, or 1.61 percent, during the week, closing today at 2,175.51.

The Russell 2000 index closed the week up 14.72, or 2.22 percent, at 678.05.

The Dow Jones Wilshire 5000 Composite Index — a free-float weighted index that measures 5,000 U.S. based companies — ended the week at 12,418.05, up 228.47 points from last week. A year ago, the index was 10,936.93.