Wall Street had its second straight late-session rally Wednesday, but the pattern of trading left market-watchers doubtful that the advance would hold ahead of a key Federal Reserve meeting and the transfer of power in Iraq next week.

Investors have largely factored in the expected rise in interest rates and a shaky transition of power in Baghdad, so many analysts think the sideways trading of the past several weeks could continue even after those events have passed. But the late-day buying was still encouraging.

The idea that the "smart money" moves in at the end of the day is "an old line," said Bill Groenveld, head trader for vFinance Investments. "But it gives me a warm feeling. . . . I think whenever more people decide to step up, it'll be to the upside."

The Dow Jones industrial average gained 84.50, or 0.8 percent, to 10,479.57, into positive territory for the year for the first time since April 27. The Nasdaq composite index surged 26.83, or 1.3 percent, to 2020.98. The Standard & Poor's 500-stock index rose 9.65, or 0.9 percent, to 1144.06.

R.J. Reynolds Tobacco Holdings soared $2.43, to $68.33, on news that its proposed merger with Brown & Williamson has been approved by the Federal Trade Commission. The combination of the nation's second- and third-largest cigarette makers still must be approved by the Securities and Exchange Commission and Reynolds shareholders. British American Tobacco, the parent company of Brown & Williamson, rose $1.35, to $32.12.

FedEx gained $1.62, to $80.05, after the package delivery company reported better than expected earnings on steady demand for ground services and international shipments.

Online auction giant eBay rose $1.14, to $88.35, after announcing plans to buy Baazee.com, the most popular online shopping site in India, for $50 million.

Other Indicators

* The New York Stock Exchange composite index rose 48.53, to 6602.34; the American Stock Exchange index rose 24.14, to 1255.85; and the Russell 2000 index of smaller-company stocks rose 8.26, to 580.15.

* Advancing issues outnumbered declining ones by 7 to 3 on the NYSE, where trading volume rose to 1.44 billion shares, from 1.38 billion on Tuesday. On the Nasdaq Stock Market, advancers outnumbered decliners by 2 to 1 and volume totaled 1.79 billion, up from 1.64 billion.

* The price of the Treasury's 10-year note rose 94 cents per $1,000 invested, and its yield fell to 4.70 percent, from 4.72 percent on Tuesday.

* The dollar fell against the Japanese yen and rose against the euro. In late New York trading, a dollar bought 108.55 yen, down from 109.32 late Tuesday, and a euro bought $1.2090, down from $1.2101.

* Light, sweet crude oil for August delivery settled at $37.57, down 68 cents, on the New York Mercantile Exchange.

* Gold for current delivery remained at $395.00 a troy ounce on the New York Mercantile Exchange's Commodity Exchange.