A better-than-expected reading of the Consumer Confidence Index lifted the stock market's spirits today. For the third day in a row, the Dow Jones Industrial Average was in rally mode, while the Nasdaq Composite Index also moved higher.

The Dow ended up by more than 260 points.

Released this morning, the

confidence index for March came in at 117, compared with economists' forecasts of 104.2. The report raises Wall Street's hopes that consumer spending will come back since the index has been trending lower since July, when it was at a high of 143. But with this morning's data revealing relative economic strength, the

Federal Reserve is not likely to make an intermeeting interest rate cut, as many had expected.

Other forces at work on today's market include a good dose of window dressing, which happens when professional money managers tidy up their portfolios to post gains or clean up their list of holdings before a quarter's end. "Because the quarter ends on Friday, anything that's doing well is doing better," said Sam Gruntal, senior managing director of equity trading at

Gruntal

.

Among the stocks out in front of this afternoon's gains were well-known names such as,

IBM

(IBM) - Get Report

, up 4.3% to $99.50,

Merck

(MRK) - Get Report

, ahead 3% to $73.61,

Procter & Gamble

(PG) - Get Report

, higher by 2.9% to $62.18 and

SBC Communications

(SBC)

, up 6.4% to $43.90.

On the sidelines of today's rally, blue-chip

Johnson & Johnson

(JNJ) - Get Report

dropped 2.5% to $83.25 after the company confirmed yesterday's reports that it is buying drug manufacturer

Alza

(AZA)

for $12 billion in stock. This is Johnson & Johnson's largest deal ever.

After dropping 5% yesterday on concerns about its outlook,

Cisco

(CSCO) - Get Report

edged higher by 1.4% to $18.13. Other large-cap stocks were trading higher, too.

Microsoft

(MSFT) - Get Report

,

Juniper

(JNPR) - Get Report

and

Intel

(INTC) - Get Report

were higher.

On the heels of recent gains, some Wall Street experts have been getting ready to call a bottom, but others still think the market will retest its lows since there has been no catalyst for the rallies. "Are people in this for the long haul or for the trade?" asked Bryan Piskorowski, market analyst at

Prudential Securities

. "The answer will unfold in the next few weeks."

Certainly, the earnings outlook isn't good. Shares of

Vitesse Semiconductor

(VTSS)

, for example, were off 14.4% to $29.06 after it warned Monday after the close that its second-quarter revenue and earnings forecasts were, perhaps, a bit ambitious. And

TranSwitch

(TXCC)

was down 19.9% to $15.06 after it joined the list of repeat offenders on the warning front, lowering its first-quarter earnings

guidance for the second time in a month.

Mobile-phone makers

Nokia

(NOK) - Get Report

, up 1% to $27.34, and

Ericsson

(ERICY)

, higher by 15% to $6.72, both

announced job cuts

early this morning.

In other economic news, the

durable goods orders report for February came in lower than expected. Production orders for big-ticket items, such as cars and appliances, was lower than expected in February, the government said this morning.

Durable goods orders fell 0.2% for the month, compared with economists' forecast for a 0.3% increase. But orders were stronger than they were in January, when they fell 7.3%, according to revised data released today. Excluding transportation, orders rose 0.5% in February.