Wall Street finished a short week on a high note Thursday as slight improvements in the geopolitical environment and continued solid economic signals helped extend a market rally that is now three weeks old.

"Today was very quiet, but I think the general tone of the market is getting better," said Andy Brooks, head of equity trading at T. Rowe Price in Baltimore. "That reflects some of the good economic news and on the margins some of the good tidbits coming out of the G8 meeting and the U.N. resolution on Iraq. . . . Things are ticking back to a 'glass is half-full mentality.' "

Brooks was referring to the Group of Eight summit of industrialized nations taking place on Sea Island, Ga., and the resolution unanimously passed by the United Nations Security Council earlier this week endorsing a plan for returning sovereignty to Iraqis.

The Dow Jones industrial average rose 41.66, or 0.4 percent, on Thursday to close at 10,410.10. For the week, the Dow gained 1.6 percent.

The broad Standard & Poor's 500-stock index rose 5.14 points, or 0.5 percent, to close at 1136.47 on Thursday. The S&P gained 1.2 percent for the week. The technology-heavy Nasdaq Stock Market composite index was up 9.26 points, or 0.5 percent, to close at 1999.87 on Thursday and rose 1.1 percent for the week.

The Dow and the S&P are now up three weeks in a row. The S&P has not had such a sustained rally since January. The index has recovered from a slide that began in early April and is now up 2.21 percent for the year. The Dow and the Nasdaq are close to the break-even point for the year, both down less than half of 1 percent.

Traders and money managers cautioned against reading too much into this week's advances because market activity was light as investors paused to mark the death of former president Ronald Reagan and awaited major events at the end of the month, including a meeting at which the Federal Reserve is expected to start nudging up interest rates. U.S. markets will be closed Friday for Reagan's funeral.

The market is also anxiously anticipating government data on inflation that was expected to come Thursday. Release of the data was postponed, however, when the Labor Department said it had encountered problems calculating the figure, the producer price index.

The fear among stock market investors is that any hint of quickening inflation could spur the Fed to raise rates more quickly. Higher rates cut into corporate profits and make stocks look expensive when compared with earnings.

Oil stocks fared well Thursday as the price of crude for July delivery rose 2.4 percent, to $38.45, on the New York Mercantile Exchange, indicating that gasoline prices will remain high. Exxon Mobil Corp., the largest publicly traded oil company, jumped 53 cents, or 1.2 percent, to close at $43.98. ConocoPhillips rose 95 cents, or 1.3 percent, to close at $75.05.

James Paulsen, chief investment strategist at Wells Capital Management, said it was a positive sign that the overall market advanced on a day when oil prices rose. In recent weeks, stocks have tended to move in the opposite direction of oil prices because of concern that higher costs at the gasoline pump will cut into consumer spending and slow economic growth.

"Oil was a non-event and that's an encouraging sign," Paulsen said.

Paulsen and others said that oil price fears may be giving way to the belief that corporate profits will continue their steady advance and the Fed will be able to keep inflation in check.

FedEx helped bolster confidence on earnings growth on Thursday. The shipping company said it earned $1.36 per share in its fiscal fourth quarter, beating expectations as demand for worldwide shipping grew. FedEx rose 93 cents, or 1.2 percent, to close at $76.94.

Other Indicators

* The New York Stock Exchange composite index rose 31.45, to 6556.97; the American Stock Exchange index rose 3.81, to 1199.29; and the Russell 2000 index of smaller-company stocks rose 0.54, to 569.12.

* Advancing issues outnumbered declining ones by 5 to 4 on the NYSE, where trading volume fell to 1.16 billion shares, from 1.27 billion on Wednesday. On the Nasdaq Stock Market, advancers narrowly outnumbered decliners and volume totaled 1.29 billion, down from 1.5 billion.

* The price of the Treasury's 10-year note rose 31 cents per $1,000 invested, and its yield remained at 4.80 percent.

* The dollar fell against the Japanese yen and the euro. In late New York trading, a dollar bought 109.32 yen, down from 110.48 late Wednesday, and a euro bought $1.2107, up from $1.2042.

* Light, sweet crude oil for July delivery settled at $38.45, up 91 cents, on the New York Mercantile Exchange.

* Gold for current delivery rose to $385.90 a troy ounce, from $384.50 on Wednesday, on the New York Mercantile Exchange's Commodity Exchange.