NEW YORK, FEB. 15 -- Iraq's peace offer was widely belittled in the financial markets today, but it was still taken seriously enough to drive down the price of oil, boost the dollar, and play a small role in helping the stock market to surge ahead to another hefty gain.

The Dow Jones industrial average rose 57.42 points to 2934.65 in moderate trading dominated by technical factors related to the monthly expiration of stock index futures and options.

Although market analysts said stock prices were aided a bit by Iraq's statement that it was willing to withdraw from Kuwait -- under numerous conditions opposed by the U.S.-led alliance -- traders and market strategists said that the main reason for today's rally was the upward momentum generated by the strong gains of recent weeks.

Stock prices first rose on reports of the Iraqi offer, then fell back after President Bush dismissed the initiative as a "cruel hoax." With just a few minutes left in the trading day, the market then soared nearly 20 points, largely on buying related to the options expiration date.

"I just think that this is the continuation of this tremendous rally that we've been through," said James A. Mullin, managing director and head of capital markets for Kidder, Peabody & Co. "The gain in the marketplace was after the market had already decided {the} Iraq {offer} was a sham."

Eric T. Miller, chief investment officer at Donaldson, Lufkin & Jenrette Inc., said the Iraqi bid provided a bit of support for the market, because it encouraged "shorts" -- those who speculate that the market will fall -- to cover their positions by buying, out of fear that peace might break out over the three-day holiday weekend.

"It's a long weekend, so some of the short sellers were probably doing some covering {of their positions by buying stocks}, with the reminder that there could be a peace breakthrough at some point," Miller said. The Iraqi bid "contributed to what was already there -- which is a continuation of this buying stampede that started a few weeks ago."

Including today's gain, the Dow rose 103.96 points for the week on trading volume that topped 200 million shares each day. The Standard & Poor's 500 and New York Stock Exchange Composite registered all-time highs at today's close. Advances led declines by a ratio of about 3 to 1 on active volume of 222 million shares, contracting slightly from 230 million on Thursday. The Amex Market Value closed up 1.93 at 342.73, still 54 points below its October 1989 record. The Nasdaq Composite closed up 4.40 at 448.71, still 37 points beneath its October 1989 apex.

Speculation that an end to the war might be near gave a particular boost to airline stocks. UAL, parent of United Airlines, rose 4 3/4 to 136 3/4; AMR, parent of American Airlines, jumped 2 5/8 to 72 7/8; and USAir edged up 5/8 to close at 20.

A similar phenomenon also affected the oil market, although it acted to push the price down. Prices first dropped sharply on news of the Iraqi statement, then bounced back as skepticism about the offer grew, and finally went lower again as traders speculated that an end to the Persian Gulf War might be closer.

On the New York Mercantile Exchange, the price of crude oil for March delivery finished the day at $20.88 a barrel, down $1.44, in a decline that analysts described in part as the result of traders' concern about their positions over the long weekend. As with stocks, few oil traders wanted to take the chance that there might be further moves over the weekend toward ending the war.

"People don't want to set a position over a three-day weekend, particularly in such a fluid situation, where you could come in Tuesday and everything could be quite different," said Ann-Louise Hittle, a senior oil analyst at Shearson Lehman Brothers Inc. "The market feels that because Saddam Hussein has made this offer, he is weakening in his stance, and therefore some sort of negotiated solution may be possible."

Traders noted that the day's activity -- marked by much smaller swings in prices than in recent months -- seemed to indicate that the oil market has generally calmed.

"I think really the war is kind of out of the market at this point," said Tom Bentz, trading director at United Energy in New York. "If there's {a ground} war, we might get a little up move in the market, and if there's peace, there might be a little of a down move."

The peace hopes combined with a smaller-than-expected U.S. trade deficit to help send the dollar higher. The U.S. currency was quoted late in New York at 1.4777 West German marks, up from 1.4665 a day earlier, and at 130.50 yen, up from 129.67.

The peace offer drove down the price of gold, traditionally considered to be a hedge against political turmoil, as the cash price fell $3.75 an ounce to a range of $363.50-$364.25 in light New York trading.

The bond market closed mixed, as an initial strong rally faded when traders recognized that Baghdad's conditions made the Iraqi initiative virtually dead on arrival.

In the stock market, Joseph A. Feshbach, executive vice president at Lehman Brothers, said it was very difficult to draw conclusions from today's activity about the market's overall direction, because so much of the buying was prompted by requirements to satisfy expiring options contracts.

Feshbach predicted that the market might retreat when a ground war begins, but that the rally would eventually resume: "After a momentum stampede like this, the market rarely gives it all back in the first correction. It {the fallback} usually is followed by a subsequent rally that goes higher than the original one."

Staff writer Mark Potts contributed to this report.