The Dow Jones industrial average rose 51.05 to 5,473.06, just shy of its high for the day.
Advancers led decliners by nearly a 2-to-1 margin on the New York Stock Exchange, with 1,555 up, 811 down and 782 unchanged. NYSE volume totaled 349.84 million shares vs. 403.61 million in the previous session.
The volatile Nasdaq market again produced the market's broadest move as technology shares rebounded for the second straight session. The index rose 14.73 to 1,077.12.
In other broad markets, the NYSE composite rose 2.50 to 340.87, and the S&P 500 list rose 4.73 to 635.90. The American Stock Exchange's market value index rose 6.56 to 539.15.
The positive tone of yesterday's rally, spurred by an encouraging earnings report from IBM Corp., was reinforced by a strong profit report from Gateway 2000, which said its sales continued to grow at one of the fastest rates in the personal computer industry.
But although the latest earnings news calmed the computer industry worries that helped push the market into a tailspin last week, investors were too hesitant possible surprises in next week's economic data to establish big positions going into the weekend.
Most prominent are Tuesday's report of the quarterly employment cost index and Friday's report on July's employment data.