NEW YORK, FEB. 9 -- The stock market posted some healthy gains today as a sudden decline in a key lending rate triggered a late burst of buying.

Analysts said the decline in the federal funds rate stirred speculation that Federal Reserve policymakers, starting a private two-day meeting, had decided to relax the central bank's credit policy, which could benefit stock prices. But some said the rate decline was probably an aberration.

The Dow Jones average of 30 industrials, which fell 14.76 on Monday, finished up 18.74 at 1914.46. The advance broke a string of four consecutive declines in the market's best-known average.

Advancing issues led losers by a margin of nearly 2 to 1 among stocks listed in the New York Stock Exchange. Volume on the Big Board came to 162.35 million shares, down from 168.85 million on Monday.

The market traded in a very narrow range for most of the session as traders were said to be awaiting the December trade deficit figures, due to be released Friday.

While many analysts expect an improvement in the trade figures, an increase in the deficit could spark concerns that the dollar must fall further to reduce the imbalance, discouraging foreign investment in the U.S. markets.

Traders were also looking for clues about the private policymaking session of the Fed's Open Market Committee, which comes amid concerns that the economy may be headed into a recession.

In the final hour of trading, the federal funds rate, which is the rate banks charge each other for short-term loans that are often needed to meet the central bank's reserve requirements, fell below 6 percent.

Newton Zinder, a veteran market watcher for Shearson Lehman Hutton Inc., said the decline triggered late buying because it "created some speculation that the Fed may have eased a bit."

Trading volume was swelled by activity in stocks involved in takeover speculation and those with dividend deadlines approaching.

Leading the most active list were three such stocks -- Consolidated Edison rose 1/4 to 45 5/8, Avon Products fell 1/4 to 23 3/4 and Panhandle Eastern fell 3/8 to 25 1/4. Federated Department Stores fell 1 1/4 to 57 7/8. It is resisting a takeover bid from Campeau Corp. of Toronto.

American Standard rose 3/8 to 67 1/4. It urged shareholders to reject a $65 a share buyout offer from Black & Decker and took steps to defend itself against a takeover.

General Motors rose 1 5/8 to 62 7/8. It reported its fourth-quarter earnings rose to $2.36 a share from 97 cents a share a year earlier.

Polaroid rose 1 1/8 to 28. There has been speculation that the company is being eyed as a takeover target by Fuji Photo Film Ltd., but Polaroid said it had not been approached, nor has it had any talks with Fuji.