Positive analyst remarks on GM's restructuring brightened Wall Street's mood, as did solid earnings reports from Amazon.com Inc. and PepsiCo Inc. A third day of lower oil prices also eased the market's inflation jitters.

But while steep gains in home sales and durable goods orders fed worries about the need for higher interest rates to control growth, optimism over the strength of the underlying economy appeared to prevail, said Ken McCarthy, chief economist for vFinance Investments.

"Right now, you could say we're sort of at a sweet spot, where we have healthy growth and reasonably high interest rates," McCarthy said. He added that the economic numbers are showing increased investments by businesses, which tends to spur non-inflationary growth.

The Federal Reserve's beige book — a survey of its 12 district banks — underscored the economy's health despite volatility in energy costs. Traders awaited more signals from Fed Chair Ben Bernanke's congressional testimony tomorrow.

According to preliminary calculations, the Dow Jones industrial average jumped 71.24, or 0.63 percent, to 11,354.49. The Dow surged as much as 96 points earlier, but despite the pullback remained at its highest levels since January 2000.

Broader stock indicators also rose. The Standard & Poor's 500 index added 3.67, or 0.28 percent, to 1,305.41, and the Nasdaq composite index gained 3.33, or 0.14 percent, to 2,333.63.

Bonds continued their plunge, with the yield on the 10-year Treasury note rising to 5.11 percent from 5.07 percent late yesterday. Although many on Wall Street fretted about the 10-year crossing 5 percent for the first time in four years, that level was mostly a psychological barrier and breaking through may actually be benefiting the market, said Scott Merritt, U.S. equity strategist for JPMorgan Asset Management.

"I would actually view that as a positive influence on the equities market," Merritt said. "The Treasury yield curve moving up is doing the job for the Fed" by lifting lending costs, which weighs on consumer spending and could limit economic growth.

Elsewhere, the dollar was little changed against other major currencies, and gold prices inched higher.

Crude futures fell for a third straight session after a government report showed further declines in motor fuel demand, while oil and gasoline reserves also shrank. A barrel of light crude dropped 95 cents to settle at $71.93 on the New York Mercantile Exchange.

Wall Street was unfazed by the Fed's beige book survey, which said rising energy costs were hurting businesses. Competition, however, was limiting their ability to raise prices and recoup those costs, the central bank said.

The Commerce Department said orders for durable goods jumped 6.1 percent in March, more than triple the 1.8 percent economists predicted. The department also said new home sales climbed 14 percent to 1.21 million for the month, beating estimates for 1.1 million despite the rebound in mortgage rates from historic lows.

GM led the Dow industrials higher, jumping $1.74 to $23.15. Merrill Lynch upgraded the automaker one notch to "neutral" on beliefs that its restructuring is moving in the right direction.

Fellow Dow component Boeing Co. said an upswing in plane deliveries helped profit grow 29 percent last quarter, but its revenue fell short of expectations. Boeing shares slid 20 cents to $84.91.

PepsiCo's profit gained 12 percent as sales of beverages and snack foods increased during the period. The company also backed its 2006 outlook. PepsiCo rose 36 cents to $57.86.

Amazon.com late yesterday reported a 35 percent drop in earnings after a hefty gain boosted last year's profit. The online retailer's results still met Wall Street targets; shares added 24 cents to $35.79.

CBS Corp. said earnings were lower because of its split from Viacom Inc. earlier this year, but otherwise were flat as strength in television and outdoor advertising countered radio weakness. CBS fell 22 cents to $25.15.

Advancing issues led decliners by about 6 to 5 on the New York Stock Exchange, where volume of 1.78 billion shares topped the 1.69 billion shares that changed hands yesterday.

The Russell 2000 index of smaller companies added 0.41, or 0.05 percent, to 765.23.

Overseas, Japan's Nikkei stock average rose 0.5 percent. Britain's FTSE 100 gained 0.29 percent, Germany's DAX index rose 0.47 percent and France's CAC-40 was higher by 0.32 percent.