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In addition, the Mortgage Bankers Association reported that a new flood of mortgage-refinance applications last week pushed so-called refi activity to another record weekly high.
 
But the broader underpinning for the buying comes from recent comments made by Fed Chairman Alan Greenspan, fueling a belief that the Federal Reserve will succeed in boosting the economy by "targeting" long-term interest rates and keeping them down.
 
Many analysts believe the Fed will cut its target for short-term interest rates at its policy meeting later this month. But more important to some bond traders, the analysts believe that, to ensure that rising longer-term rates don't choke off the recovery, the Fed could wind up buying longer-term Treasury bonds in the open market.
 
That buying would push yields down and make existing bonds more attractive. And that, together with a belief among some foreign investors that U.S. securities will do better than foreign ones in the immediate future, is helping attract money back to Treasurys, which have been stronger than almost any analyst expected this year.
 
The hottest investments of the day, once again, were volatile technology stocks such as computer-chip makers, networking stocks and Internet stocks. The Nasdaq Composite Index, which is dominated by such stocks, rose 1.94%, or 31.09 points, to 1634.65, a gain of 29% since March 11. Nasdaq trading volume, at 2.48 billion shares, was the second heaviest of the year, just behind Monday's 2.51 billion shares. The Nasdaq index is up 22% since the year began. Motorola rose 5.5%, Sun Microsystems jumped 6.6%, and Applied Materials advanced 5.2%.
 
Many traders believe that another reason for the market's recent strength has been the ability of the broad Standard & Poor's 500-stock index to move above the closely watched 965 level and avoid falling back. That level, one that has marked a turning point for stocks in past years, is more closely watched by many pros than the 9000 level on the Dow industrials.

The S&P 500 Wednesday jumped 1.51%, or 14.68 points, to 986.24, up 23% since March 11 and up 12% on the year.
 
The dollar rebounded again against the euro, recovering some ground lost recently.
 
Another powerful support for the stock market has been the effort by money managers who missed the early gains to jump in. Many are telling their traders to buy stocks whenever there is a pullback, so that even a minor stock decline sets off a wave of new buying.
 
Partly as a result, the Dow industrials have been up on nine of the past 10 trading days. On the day that they declined, the fall was less than 1%.
 
Reflecting the optimism: Wednesday, on a day when Martha Stewart was indicted on obstruction of justice charges, stock in her company, Martha Stewart Living Omnimedia, which had fallen the day before in anticipation of the indictment, rebounded 5%.
 
Many investors remain skeptical that stocks can hold their sharp gains. The S&P 500 is trading at a lofty 31 times earnings for the past 12 months and 18 times forecast earnings for the coming year, a high level from which many investors think it will be hard to post big gains. Stocks are considered overdue for at least a temporary pullback. But few want to bet on any immediate declines.
 
"My line in the sand was 965 on the S&P," said David Briggs, head of stock trading at Pittsburgh mutual-fund group Federated Investors. "When the index broke out with a vengeance, I just said, 'OK, that's it.' " He abandoned any immediate skepticism, he said.
 
The current market reminds him of 1997, he said, when stocks hit bottom in April and jumped 30% in a short period. "Something tells me we could have another 5% to 10% on the S&P, and I'm kind of thinking more toward 10% at this point," he said.
 
Mr. Briggs said he was surprised at the strength of the rally and, eventually, still expects a decline. But he doesn't see any sign of it yet. A market trading at "31 times trailing earnings isn't the stuff of a new bull market. But I'm not going to step in front of that train," he said.
 
Many skeptics seem to be throwing in the towel. Traders said that some of the recent gains came from what Wall Street calls "short covering," or the departure, through buying, of short sellers who bet on market declines.
 
Traders noted that, within the next few weeks, companies will begin to issue warnings about any unexpectedly weak performance in the current quarter, which ends this month. How many warnings are issued and how strong the earnings turn out to be could say a lot about what happens to the recent rally.
 
In major U.S. market action:
 
Stocks rose. On the Big Board, where 1.6 billion shares traded, 2,545 stocks rose and 769 fell.
 
Bonds gained. The 10-year Treasury note rose 12/32, or $3.75 for each $1,000 invested. The yield, which moves inversely to price, fell to 3.290%. The 30-year bond was up 7/32 to yield 4.352%.
 
The dollar was mixed. Late in New York, it traded at 118.84 yen, down from 119.16 yen Tuesday, while the euro fell against the dollar to $1.1664 from $1.1740.