NEW YORK (CNNMoney.com) - Stocks jumped near the close Wednesday, restarting the early '06 rally after struggling through most of the session, as gains in technology and financial led the way.

The Dow Jones industrial average (up 31.86 to 11,043.44, Charts) and the S&P 500 (up 4.49 to 1,294.18, Charts) index both added around 0.3 percent, closing at fresh 4-1/2 year highs.

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The Nasdaq composite (up 11.04 to 2,331.36, Charts) gained nearly 0.5 percent, closing at a new almost two-year high.

"The bears are just not winning," said Barry Hyman, equity strategist at Ehrenkrantz King Nussbaum. "We had a great first week and the rally is continuing today."

Stocks swayed near unchanged throughout the session Wednesday as investors eyed a jump in oil prices and struggled to digest the early-year gains. But the bulls managed a late-session comeback, extending the recent rally.

The Dow and S&P 500 have now gained six out of seven sessions and the Nasdaq has gained 7 sessions in a row.

The renewed optimism has infused many aspects of the market, Hyman noted, with small- and mid-cap stocks participating as well as larger names. Technology has continued to show leadership and lately, the financial stocks are moving up as well. Gains in both sectors are seen as significant for the broader market advance.

"The market has been quite remarkable so far this year, in light of higher oil prices," said Robert Philips, president of Walnut Asset Management. "I think that's largely been because of bets that the Federal Reserve will stop raising rates fairly soon."

However, the analysts cautioned that when the euphoria wears off, stock may be in for a big selloff.

Such a decline could be triggered by concerns about the economy slowing down, as well as consumer spending and earnings growth easing. Or it could be sparked by concerns in the days leading up to the next Fed meeting at the end of January.

"If the market is discounting Jan. 31 as the day when the Fed raises rates for the last time this year," Hyman said, "and we get signs that isn't going to be the case, then you could have a problem."

-- For a look at why analysts are concerned the rally has been too much, too fast, click here.

After the close Wednesday, reports surfaced that Johnson & Johnson (Research) may have raised its offer for medical device maker Guidant (Research), according to the Wall Street Journal. Shares of J&J had slipped during the regular session as Guidant mulled whether to accept a $25 billion bid from competing suitor Boston Scientific (Research).

Thursday morning brings the release of the November trade balance and the weekly jobless claims report.

Legg Mason (up $3.69 to $130.40, Research) and Lehman Brothers (up $2.97 to $134.65, Research) were among the stocks boosting the Amex Securities Broker/Dealer (Charts) index.

Gains in a variety of energy stocks lifted the Philadelphia Oil Service (up 1.51 to 203.29, Charts) index by 0.8 percent.

Apple Computer (up $3.04 to $83.90, Research) added 3.8 percent, gaining for the second session in a row after unveiling new computers that use Intel (up $0.02 to $26.14, Research) chips.

The maker of the iPod and iMac computers also reported strong holiday sales, thanks in large part to surging demand for its popular digital music players.

Following the news, a number of brokerages boosted earnings forecasts on Apple Wednesday.

Rambus (up $3.89 to $32.20, Research) jumped nearly 14 percent, extending its recent run following a ruling last week that a memory patent trial with Hynix Semiconductor can go forward, even though Hynix had requested it be dismissed.

Other chip stocks rose too, boosting the Philadelphia Semiconductor (up 8.69 to 536.44, Charts) index by almost 1.7 percent.

Dow stock Hewlett-Packard (up $0.56 to $31.34, Research) gained after Prudential upgraded the stock to "overweight" from "neutral."

Fellow Dow stock Boeing (up $1.00 to $70.10, Research) gained on news that it beat out Airbus for an $11 billion aircraft order from Air-India.

Other Dow gainers included Home Depot (up $1.15 to $42.95, Research), Wal-Mart Stores (up $0.71 to $46.57, Research) and McDonald's (up $0.60 to $35.34, Research).

On the downside, DuPont (down $1.41 to $41.14, Research) shares sank 3.3 percent after issuing a profit warning. The chemical maker said it will miss forecasts due to the impact of the two hurricanes last fall and other factors.

It was the second Dow component this week to disappoint. On Tuesday, Alcoa (down $0.40 to $29.20, Research) reported earnings that missed forecasts.

Genentech (down $4.12 to $89.22, Research) shares slumped following the company's earnings report late Tuesday. The drugmaker said sales of its colon cancer treatment Avastin were short of estimates, which overshadowed its higher quarterly earnings that were in line with estimates.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by six to five on volume of 1.74 billion shares. On the Nasdaq, advancers narrowly edged decliners on volume of 2.41 billion shares.

U.S. crude oil for February delivery rose 57 cents to settle at $63.94 a barrel on the New York Mercantile Exchange. Oil prices had slipped following the mid-morning release of the weekly crude oil inventories report.

Treasury prices slipped, raising the yield on the 10-year note to 4.45 percent from 4.43 percent late Tuesday. Treasury bond yields and prices move in opposite directions.

The dollar fell versus the euro and yen.

COMEX gold for February delivery rose $4.40 to $550.10 an ounce.