By Kate Gibson

As stocks climbed toward their first two-week stretch of gains in nearly 11 months, equity analysts said the recent run higher bodes well for the remainder of March, though the dicey economic climate still weighs heavily on the market.

"The latest relief rally was sparked by lots of good news for a refreshing change, which I believe may have some staying power," said Ed Yardeni, president and chief investment strategist, Yardeni Research Inc.

Up 0.7% for the week, the Dow Jones Industrial Average on Friday fell 122.42 points, or 1.7%, to 7,278.38, leaving the blue-chip index up 0.7% for the week, and giving it its first consecutive weekly gains since the period ending May 2, 2008, when it rose three weeks straight.

"The fundamentals are challenging; earnings and uncertainty. The market was vastly oversold a few weeks ago, so we weren't surprised by a relief rally -- our sense is use rallies as a way of implementing short positions at higher prices," said Dean Curnutt, president of Macro Risk Advisors.

Utilities, consumer staples and health care led sector gains Friday, while financials, energy and industrial shares fronted the losses on the S&P 500 Index , which fell 15.5 points, or 2%, to land at 768.54, up 1.5% from the week-ago close. The technology-laden Nasdaq Composite (RIXF) shed 26.21 points, or 1.8%, to 1,457.27, leaving it up 1.8% from last Friday's close.

"We believe the current rally has some limited room to run into the end of the quarter, as money managers who have been underweight equities look to lock in their outperformance," said Nicolas Colas, chief market strategist, BNY ConvergEx.

A portion of this week's likely gains came on Wednesday, when stocks restarted the prior session's rally after the Federal Reserve's surprising announcement that it would buy $300 billion in longer-term Treasurys to help the ailing economy.

"We think the Fed has put a floor under financial system confidence and therefore stock prices. If a trillion dollars of stimulus cannot buy the economy some meaningful relief, we have much, much bigger problems. If that is the case, we will know in the second quarter," said Colas.

Less optimistic on a continued run higher in the immediate future, Nick Kalvas, equity analyst at MF Global Research, said the market tends to trade lower post March expiration. Plus, "credit remains a negative despite the Fed's action," said Kalvas.

Earnings, Geithner on Tap

Conversely, "the market may not want to be too short with Treasury Secretary Geithner ripe to supply a plan to heal the financial sector," said Kalvas of expectations the Treasury secretary would outline help for the financial system on Thursday.

"Many are looking for a strong plan to address toxic assets to be announced with leaks in the days before the speech," said Kalvas.

Colas expressed concern that the earnings season would not bring "any real information about the post-liquidity bubble earnings power of the U.S. economy," calling it the central issue for equities. "The market is only truly cheap if corporate earnings can show modest improvement through 2009," he said of hopes that stock prices have largely bottomed out.

"The stock market is still dealing with the uncertainty question. This uncertainty centers on the longer-term health of the economy and the outlook for corporate earnings," said Robert Pavlik, chief market strategist, Banyan Partners LLC.

Next week brings earnings from upscale jewelry Tiffany & Co. (TIF) and drugstore chain Walgreen Co. (WAG) on Monday, followed by Commercial Metals Co. , Carnival Corp. (CCL) and Jabil Circuit Inc. (JBL) on Tuesday.

"While the uncertainty has kept many investors on the sideline throughout this recent two week rally we have maintained our cautious optimism that stocks will recover during the second half of this year or early into 2010," said Pavlik.