"Oil below $60 a barrel grabbed folks' attention," said Bob Sitko, who manages more than $500 million as a lead portfolio manager with USAA Private Investment Management. "When the market decides to pay attention to things is a bit of Rubik's cube, but this is a big deal."

Other analysts attributed some of the rise to sheer momentum, as Wall Street initially had a muted reaction to oil's decline and the pickup in retail sales.

"It's sort of what other people think other people are doing," said Sandy Lincoln, chief market strategist, Wayne Hummer Investments. "You get this momentum buying and it could move the market pretty high, pretty quickly. (But) it could go the other way tomorrow."

The market seemed to shed completely yesterday's torpor, when investors sent shares lower as they worried about new Federal Reserve chairman Ben Bernanke's remarks before Congress today, his first appearance on Capitol Hill as Fed chairman.

According to preliminary calculations, the Dow rose 136.07, or 1.25 percent, to 11,028.39, its first foray past 11,000 since Jan. 12.

Broader stock indicators also closed sharply higher. The Standard & Poor's 500 index rose 12.67, or 1 percent, to 1,275.53, and the Nasdaq composite index rose 22.36, or 1 percent, to 2,262.17.

Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange

Bonds fell, with the yield on the 10-year Treasury note rising to 4.61 percent from 4.58 percent late yesterday. The U.S. dollar was mixed against other major currencies in European trading. Gold prices were lower.

The most dramatic news on Wall Street was the decline in crude oil futures, which fell amid expectations that a U.S. supply report will show higher crude inventories. A barrel of light crude settled at $59.57 a barrel, down $1.67, in trading on the New York Mercantile Exchange.

Energy prices have been declining steeply. Gasoline futures have fallen roughly 22 percent in the last two weeks, while crude is down roughly 13 percent and natural gas prices are 50-percent lower than their mid-December peak, Sitko said.

The day's other heartening economic news came from the Commerce Department, which said retail sales outside of autos rose by the largest amount in more than six years.

"You start to reflect on the retail numbers and and say, 'That's 70 percent of GDP,"' Lincoln said. The retail numbers, coupled with strong corporate outlooks, have some investors believing the country's economic expansion isn't over, he said.

In company news, Deere & Co., one of the world's largest manufacturers of farm and lawn-care equipment, rose 87 cents to $74.67 after it posted a 6 percent rise in first quarter profit and predicted its first-quarter sales trend will continue through 2006, with sales expected to grow by 3 to 5 percent for the year.

3M Co., a diversified manufacturer, rose 79 cents to $73.70 after it boosted its quarterly dividend 9.5 percent and announced a $2 billion share buyback program.

Qwest Communications International Inc., one of the nation's largest phone companies, posted a wider fourth-quarter loss on one-time items. But results excluding items topped Wall Street estimates on improved revenue, margins and cash flow and the stock rose 10 cents to $6.

The Coca-Cola Co. rose 60 cents to $41.34 after it said billionaire investor Warren Buffett will not stand for re-election to Coke's board of directors. Buffett, who has been on the board of Coke, the world's biggest soft drink company, since 1989, said he made his decision because of increased demands on his time resulting from acquisitions by his holding company, Berkshire Hathaway Inc. But some investors had been pushing Buffett to leave the board, saying Coke's business with companies owned by Berkshire created a conflict of interest. Berkshire's thinly traded A shares rose $100 to $88,100.

Marsh & McLennan Companies Inc. fell $1.51 to $29.71 after the company, the nation's largest insurance brokerage, reported profits of $35 million in the fourth quarter. Its earnings were an improvement from the year-earlier loss but fell below Wall Street expectations.

The Russell 2000 index of smaller companies rose 9.17, or 1.29 percent, to 719.70.

Volume on the New York Stock Exchange was 1.81 billion shares, up from 1.37 billion at the same time yesterday.

Overseas, Japanese stocks bounced back after a two-day decline, with technology, auto, machinery and banking stocks leading the market higher. Japan's Nikkei stock average rose 1.93 percent.

Britain's FTSE 100 fell 0.02 percent, Germany's DAX index gained 0.12 percent, and France's CAC-40 rose 0.08 percent.