Stocks finished higher for the third straight week yesterday, after fluctuating widely during the past five days in reaction to a flurry of mixed earnings announcements from more than 150 U.S. companies.

The Dow yesterday climbed 126.65, or 1.5 percent, to finish at 8443.99, while the broader-based Standard & Poor's 500-stock index jumped 15.15, or 1.7 percent, to 897.65. The technology-heavy Nasdaq composite index gained 32.42, or 2.5 percent, to 1331.13.

For the week, the Dow and the S&P 500 both gained 1.5 percent, and the Nasdaq rose 3.4 percent. The S&P has gone up almost 16 percent since Oct. 9, when the index hit a 5 1/2 year low. With investors wondering how long the market surge can last, the numerous earnings reports were closely examined.

Much of this week's gyrations were attributed to a majority of companies beating analysts' expectations for the third quarter, but some had less-than-encouraging profit forecasts for this quarter. And many companies attributed their better earnings to cost-cutting, not booming sales or higher prices, which are indicators of a strong economic recovery.

"What investors are responding to is the positive earnings news that is out there," said Jeffrey M. Applegate, chief market strategist at Lehman Brothers. "But there are those who are drawing other conclusions based on the same information."

For instance, Applegate noted that analysts now expect the average S&P 500 company's earnings growth to be 17.3 percent in the fourth quarter. He cited this as an indicator of healthy growth. But others analysts pointed out that this estimate is lower than the 19.9 percent increase that many had forecast on Oct. 1.

Wells Fargo economist Sung Won Sohn said the makeup of the earnings is as important as actual numbers and analysts' expectations. "Overall, the quality of the earnings has not been good," he said. "The increases seem to be coming from cost-cutting, rather than from sales volume gains or increased pricing power. That's why the announcements haven't given me much confidence in the market."

About three-quarters of the companies in the S&P 500 have reported earnings so far, with 59 percent beating analysts' expectations and only 14 percent falling short, according to Thomson First Call. Analysts are forecasting that the average third-quarter earnings growth for an S&P 500 company will end up being about 5 percent, considerably lower than the 16.6 percent many predicted at the end of July.

The market has been indecisive in reacting to earnings announcements that can be read multiple ways. For example on Oct. 16, Boeing announced earnings of 46 cents per share, which met analysts' expectations even though it was a 43 percent decline from its year-earlier profit. The stock price fell almost 5 percent in the two days after the announcement, but the shares recovered over the past week, closing yesterday a shade below their price before the report. Yesterday the company also said it will soon lay off about 1,200 workers. And Sun Microsystems announced on Oct. 17 that it had lost 2 cents a share in the third quarter, beating analysts' expectations of a per-share loss of 4 cents. Sun also said it will soon lay off workers. Its stock price fell more than 14 percent in the two days after the earnings announcement but by yesterday had risen back to the level just below its pre-announcement price.

In addition, analysts said, the earnings growth numbers may look large only because third-quarter numbers last year were so dismal, especially after the Sept. 11 terrorist attacks. Earnings from the third quarter of 2001 had fallen 21 percent from the same period of 2000.

"Coming off of such a low base like that, while it is certainly good we're doing better, it certainly doesn't mean we're doing well," said Alan Ackerman, a market strategist at financial services company Fahnestock & Co. "The biggest issue is not how things look during last quarter, but how they're looking in the quarter ahead."

Just as they have drawn mixed conclusions from results for the three months ending Sept. 30, analysts have shown divergent views of how the fourth quarter is shaping up.

Helping fuel yesterday's advances was an announcement from Lehman Brothers, which raised its rating on Wyeth and Schering-Plough, saying they were undervalued compared with their earnings potential for this quarter. Wyeth climbed $1.24, to $34.50, and Schering-Plough rose $1.23, to $20.35. Other drug companies also gained, including Pfizer, up $1.33, to $31.90, and Merck, which surged $2.42, to $52.91.

But shares of Cigna plunged 38 percent yesterday, to $39.39, after the company said its earnings next year were likely to miss analysts' estimates.

Other Indicators

* The New York Stock Exchange composite index rose 6.93, to 479.15; the American Stock Exchange index fell 0.65, to 812.01; and the Russell 2000 index of smaller-company stocks rose 6.62, to 372.64.

* Advancing issues outnumbered declining ones by 13 to 6 on the NYSE, where trading volume fell to 1.35 billion shares, from 1.7 billion on Thursday. On the Nasdaq, advancers outnumbered decliners by 9 to 5 and volume totaled 1.43 billion, down from 1.89 billion.

* The price of the Treasury's 10-year note rose $2.19 per $1,000 invested, and its yield fell to 4.09 percent, from 4.13 percent on Thursday.

* The dollar fell against the Japanese yen and rose against the euro. In late New York trading, a dollar bought 124.23 yen, down from 124.60 late Thursday, and a euro bought 97.68 cents, down from 97.73.

* Light, sweet crude oil for December delivery settled at $27.05 a barrel, down $1.15, on the New York Mercantile Exchange.

* Gold for current delivery rose to $313.40 a troy ounce, from $310.70 on Thursday, on the New York Mercantile Exchange's Commodity Exchange.