The Dow Jones industrial average was up 83.12 at 6,823.86, after stumbling a bit in late morning and then recovering.
The Dow, while still below its all-time closing high of 6,883.90 on Jan. 21, was slowly rebuilding from its drop to 6,660.69 on Jan. 27.
"We had a market that was in a matter of 20 days up 500 points, and in three days took 200 points off that in a mini-correction," said Arthur Hogan, the senior stock trader at Dean Witter Reynolds Inc. "What we're doing is backing and filling. We walk them up a little bit every day."
Advancers outnumbered decliners by a 5-to-3 margin on the New York Stock Exchange, with 1,554 up, 934 down and 844 unchanged. NYSE volume totaled 520.4 million shares vs. 498.39 million yesterday.
The Standard & Poor's 500-stock list rose 11.67 to 784.17, and the NYSE's composite index rose 5.11 to 411.20. The Nasdaq composite index advanced 12.34 to 1,367.51, and the American Stock Exchange composite rose 0.99 to 588.66.
The 30-year Treasury bond was up 7/32 point, pushing its yield, which moves opposite the price, down to 6.87 percent, after the Labor Department said first-time state jobless claims rose by 10,000 to 351,000 in the week ended Jan. 25. Analysts thought the number of applications would fall 6,000 from the previous week's revised level of 341,000, which was originally reported as 355,000.
Larry Rice, chief investment officer at Josephthal, Lyon & Ross, said cash flows into stock mutual funds were strong this month, especially into index funds, which simply replicate the stocks in any given index such as the S&P 500. That has pushed big-name stocks up faster than their smaller brethren, Rice said.
"What's surprising is how the small caps just have failed to keep up," Rice warned, a sign that January's gains may not be very long lived. "You certainly want to be careful after the end of the month," Rice added. New investment "won't dry up, but it will begin to slow down."