Updated from 4:05 p.m. EDT

Stocks rallied sharply Thursday, as strong earnings were able to push the market through levels seen before Fed Chairman Alan Greenspan confirmed earlier this week that higher interest rates are on the way.

The major indices posted their biggest one-day point-gain in almost a month, with the Dow Jones Industrial Average closing up 143.93 points, or 1.4%, to 10,461.20. The Nasdaq finished up 37.28 points, or 1.87%, to 2032.91; and the S&P 500 was up 15.86 points, or 1.41%, to 1139.95. The 10-year Treasury note was trading up 10/32 in price to yield 4.38%, while the dollar dropped against the euro and climbed against the yen.

Volume on the New York Stock Exchange exceeded 1.8 billion shares, and advancers outnumbered decliners by about 7 to 2. On the Nasdaq, over 2.1 billion shares changed hands, and advancers outpaced decliners by about 2 to 1.

Momentum was provided by oil-service stocks, with the Oil Services Index up 3.2%. The Amex Airline Index rose 3.7% on its third straight day of gains. Also, software stocks, forest products and biotechnology showed particular strength, but the market boasted gains across the board.

Joe Veranth, executive vice president at Dana Investments, said the strong earnings season is finally having its desired effect. "We've seen a lot of positive earnings surprises, and people are starting to see that companies are overdelivering on expectations," he said. "Also, Greenspan's measured response to inflation concerns was positive for the stock market. As long as the market believes that the Fed is going to do what it takes to keep inflation under control, that's a good thing for stocks in the end.

"We do expect a couple of Fed rate moves this year, even before the November election," he added.

Collin Monsarrat, a trader at Birinyi Associates, said a simultaneous rise in stock and bond prices, which normally maintain an inverse relationship, supports his view that the market's gains were more of a technical bounce from the oversold condition the markets had reached than anything else. "I think a lot of traders might be stepping in to look for a quick buck here," he said.

Action was choppy in the first 90 minutes of trading, but the rally picked up steam as the major indices crossed their 50-day simple moving averages.

To that end, the markets are essentially at the levels they started at when Greenspan began his first day of testimony on Tuesday at 2:30 p.m. EDT. Richard Dickson, senior strategist at Lowry's Reports, said the market is still well within a trading range that has contained the markets since the major indices hit their mid-March lows and then rallied to highs in early April. "If you're going to accomplish anything other than some more noise in the market, or if you're going to talk about re-establishing an uptrend, you've got to get above those recovery highs."

Dickson said the current trading range tops out at about 10,570 on the Dow, 1150 on the S&P, and 2080 on the Nasdaq. "This has been a very frustrating market for both bulls and bears," he added. We haven't been able to sustain a move either up or down. You have to get some follow-though with some good demand behind it to really re-establish any kind of uptrend, and that's been a hallmark of the market since the beginning of the year. You have not had any sustainability in either supply or demand."