Despite war uncertainties, stocks closed sharply higher Friday in heavy trading, paced by the Dow industrials, which got a late boost from buying tied to the "double-witching hour" expirations of futures and options.

The Dow Jones industrial average - which soared 114.60 Thursday, its second-biggest gain ever - rose 23.27 more to close at 2646.78.Among broader market gauges, the New York Stock Exchange composite index rose 1.89 to 180.87 and the Standard & Poor's 500-stock index added 4.26 to 332.23. The price of an average share jumped 33 cents.

Advances led declines 828-674 among the 1,965 issues crossing the NYSE tape. Big Board volume totaled 226,770,000 shares, compared with the 318,890,000 traded Thursday, which was the eighth busiest session on record.

After opening lower in the wake of Iraq's overnight missile attack on Israel, stocks seesawed in the early afternoon on news out of the Mideast. Then, in late trading, prices, especially the blue chips, got a boost from buying tied to the "double-witching hour" expirations of stock-index futures and options.

The attack on Israel pressured prices in the early going. Investors feared Iraq's move might draw Israel into the fighting and splinter the U.S.-led alliance against Iraq - a prospect they felt would severely complicate the situation in the Gulf.

But stocks turned higher early in the afternoon when it became evident that the early selling was not enough to kill the momentum from Thursday's powerful rally. The gains came as U.S.-led forces carried out the largest air bombardment since World War II Friday against Iraq and as President Bush urged Israel not to retaliate for Thursday's attack.

Later in the afternoon, the Dow suddenly lost its 17-point gain when Israel again went on a nationwide alert in the evening, forcing residents to don gas masks and head for sealed rooms to escape possible chemical weapons.

There was no immediate word of what set off the alarm, but Pentagon officials said they did not think it was another missile attack. At that point, the Dow won back its entire gain.

Finally, expiration-related buying sent the Dow to a sharply higher close. The broad market did not match the strength in the blue chips.

"We had an external influence today, the option expiration," said Alfred Goldman, market strategist at A.G. Edwards & Sons Inc. in St. Louis. He said this primarily affected the blue chips.

"The rest of the market was in kind of a rest period. There was a tug of war between buyers and sellers as everyone tried to figure out just how much of the Mideast war has been factored into the market," he said.

Goldman said he thinks the vast majority of players feel the war will be short. Nevertheless, he expects the market to be buffeted by news from the region and to remain volatile in the near term.

On the trading floor, Citicorp was the most active issue, up 1/4 to 13 1/4 in dividend-related trading.

IBM followed, surging another 2 to 117 3/4 after rallying Thursday on a surprisingly good earnings report. Coca-Cola was third, up 7/8 to 48 5/8.

Volume of NYSE-listed issues, including trades in stocks on regional exchanges and in the over-the-counter market, totaled 268,864,710 shares, down from 377,160,200 shares traded Tuesday.

Prices were mixed in moderate trading on the American Stock Exchange.

The Amex Market Value index rose 1.23 to 303.95. Advances led declines 279-257 among the 757 issues traded. The price of an average share gained 4 cents. Volume totaled 13,651,635 shares vs. 23,628,230 traded Thursday.

The National Association of Securities Dealers composite index rose 1.18 to 376.99.