NEW YORK (CNN/Money) - U.S. stocks rallied sharply Friday, snapping a six-week losing streak, with buyers leaping in on a strong profit report from General Electric and a brokerage firm's support on IBM.

The Nasdaq composite (up 47.10 to 1210.47, Charts), the Dow Jones industrial average (up 316.34 to 7850.29, Charts), and the Standard & Poor's 500 index (up 31.40 to 835.32, Charts) all gained about 4 percent, on the heels of a strong rally Thursday. Stocks closed a little off their highs, but managed to sustain most of their momentum through the close.

For the week, the Dow gained about 4.2 percent, the Nasdaq gained around 6.2 percent, the S&P 500 gained 4.3 percent.

Many dismissed Thursday's strong rally as a result of traders covering short positions. However, Friday's rally inspired more debate, with some analysts still calling it an aberration, while others felt that Friday's volume suggested new money was coming into the market.

"The breadth was much better today than yesterday and I think that's a pretty encouraging sign. More stocks were participating and I think at least a portion of the rally is going to carry on Monday morning," Jeffrey Benton, a specialist at Performance Specialist Group, told CNNfn's Street Sweep. "But what I'd like to see is stocks up another 100 on Monday on decent volume and then be able to hold at that level. I'd like to see the Dow above 8,000," before he's convinced the rally is sustainable.

In terms of statistics, what an extended rally has going for it is that the Dow has moved at least 100 points in either direction in 12 of the last 14 sessions. Going against it is the fact that the last two-session-in-a-row rally, Sept. 25 and 26, was followed by an almost 300-point slide the following day.

What may challenge this particular rally's longevity is what's said by the slew of big companies expected to report their quarterly results next week, including 14 of the 30 companies that make up the Dow Industrials.

Trading is expected to be fairly low-key Monday, with the Treasury market closed in honor of the Columbus Day holiday.

But the next three days bring a large array of profit reports. Among the most eagerly anticipated: General Motors, Citigroup and Intel on Tuesday; IBM, Boeing, Coca-Cola, Ford Motor, J.P. Morgan Chase and Merrill Lynch on Wednesday; Microsoft, Philip Morris and Sun Microsystems on Thursday; and Merck on Friday.

Economic news includes reports on business inventories on Wednesday, housing starts and building permits on Thursday and consumer prices on Friday.

It was a week that didn't look like it would end higher. Worries about corporate profits, the situation in Iraq and the economic impact of the West Coast port disputes knocked stocks lower on Monday.

But news that the Bush administration would seek a court order to reopen the West Coast ports, ending the lockout, gave traders a reason to cover short positions Tuesday, boosting stocks.

Worries about General Electric and the automotive sector dragged stocks down to new multi-year lows Wednesday, and the selloff was perhaps substantial enough to lure buyers back in for the last two sessions of the week, aided by some decent profit outlooks from influential companies.

On Friday, General Electric (GE: up $1.61 to $24.21, Research, Estimates), a Dow component, reported third-quarter earnings per share of 41 cents, in line with estimates and better than the 33 cents it earned one year earlier. Looking forward, the company also said it will meet current full-year profit estimates.

Market participants jumped on the news, as it seemed to silence the din of doubting brokerage firms -- such as Morgan Stanley and Merrill Lynch -- who had slashed estimates and ratings on the conglomerate earlier in the week, creating panic that one of America's biggest and most influential companies was having serious profit concerns.

Shares of IBM (IBM: up $6.34 to $63.92, Research, Estimates), another bellwether and Dow component, rallied as well, after Lehman Brothers raised its rating on the tech leader to "overweight" from "equal weight." The firm said it thinks the computer company will make its third-quarter estimates and that overall business spending on information technology should pick up a little in 2003.

A more than 9 percent gain in IBM's shares supported the rally in the Dow, where the stock trades, and in the Nasdaq, where tech issues dominate.

Citigroup (C: up $1.83 to $30.40, Research, Estimates), J.P. Morgan Chase (JPM: up $1.24 to $17.19, Research, Estimates) and American Express (AXP: up $1.57 to $30.87, Research, Estimates) fired up a rally in the financial services sector and were among the biggest advancers in the Dow industrials.

Cisco Systems (CSCO: up $0.57 to $10.32, Research, Estimates) and Intel (INTC: up $1.04 to $15.22, Research, Estimates) led the charge of a broad range of tech issues lifting the Nasdaq.

"Market psychology is playing a big role in this," said Charles Payne, CEO and chief analyst at Wall Street Strategies. "The worst-case scenario has already been baked into markets over the last six weeks, so if big companies like GE today and possibly IBM next week can meet their estimates, that tells us that, sure, things aren't great, but they're not that bad either."

Worries about the threat of Iraq and how the United States will handle it has weighed on U.S. stocks for the last two months. News that the Senate has joined the House of Representatives in giving President Bush the power to launch a military attack on Iraq addressed and quelled some of those fears, supporting the market's advance.

The Bush administration has said that it will not necessarily take any action, but wanted to make it clear to the rest of the world that the United States is speaking with "one voice."

"Two strong days for the Dow in a row is something we haven't seen in a while, so that's encouraging, but it also brings out speculators and opportunists, so we have to be aware," Payne added.

On the downside, the University of Michigan's preliminary October report on consumer sentiment showed a worse-than-expected drop. The index fell to 80.4 from 86.1 in September; economists surveyed by Briefing.com were only expecting a dip to 85.2.

In addition, a slowdown in retail sales remains a concern for market participants. September retail sales declined 1.2 percent compared with a forecast for a 1.1 percent drop. Excluding autos, sales gained 0.1 percent, in line with estimates. A number of chain stores reported disappointing monthly results during the previous session.

While momentum initially dipped on the Michigan number before quickly recovering, the retail sales figure seemed to have no impact.

"The market is ignoring some of the negative economic reports and is instead focusing on the positives, like GE, which is a big change in terms of the focus and the psychology," said Peter Cardillo, director of research at Global Partners Securities.

With the rise in stocks came a related decline in Treasury prices, pushing the 10-year note yield up to 3.78 percent by the close from 3.66 percent late Thursday. Treasury markets are closed Monday for Columbus Day. The dollar gained against the yen but weakened against the euro.

Light crude oil futures rose 36 cents to $29.43 a barrel. Gold was slightly lower.

Market breadth was positive on strong volume. On the New York Stock Exchange, advancers topped decliners by almost 4-to-1 as 1.81 billion shares changed hands. On the Nasdaq, winners beat losers by more than 11-to-5 as 1.90 billion shares traded.