Yingst said the market could easily switch directions in the coming days. "Traders are just following the trend one way on one day, but are perfectly happy following it the other way the next."
The Standard & Poor's 500 rose 14.22 points to 1,329.10. The Nasdaq composite gained 17.72 points to 2,836.33.
The gains were broad. All 10 industry groups in the S&P 500 rose. International Game Technology led the S&P with a 14.3 percent leap, following the company's announcement that it would buy up to $1 billion of its own stock. The stock jumped $1.90 to $15.12.
Just the whiff of another round of help from the Fed has been enough to shoot stocks higher in recent weeks, but the gains often disappear as quickly as they arrive. Last Wednesday, the Dow posted its best day this year, surging 286 points. Comments from a Fed official that hinted at more stimulus helped launch the rally.
The enthusiasm fizzled the next day, however, after Fed Chairman Ben Bernanke told a closely watched Congressional hearing that no new steps were being contemplated at the moment.
The question of will or won't the Fed act next week is top of mind for investors. The Fed's latest round of bond purchases winds down at the end of this month, and market players wonder whether a third is on the way, or if the current program might be extended. By making trillions of dollars' worth of bond purchases, the Fed helps keep interest rates ultra-low and encourages investors to put money into other assets, like stocks.
"Ultimately, all that matters for investors right now is whether these developments mean the Federal Reserve is more or less likely to ease policy in order to support what they may see as an insufficiently strong economic recovery," said Dan Greenhaus, chief global strategist at the brokerage BTIG, in a note to clients.