STOCKS rallied again yesterday on renewed optimism that the latest signs of strong economic growth would not send inflation and interest rates soaring. Broader measures advanced sharply as well, with blue chip and other large company shares showing the biggest gains.

Trading was light, but stock investors were cheered to see interest rates ease again as the bond market advanced for the second straight session after Friday's robust employment report.

Having endured several market jolts this year from surprisingly strong employment reports, investors were heartened that Friday's data on August payroll levels fell within expectations.

The NYSE's composite index rose 3.61 to 356.28, and the Standard and Poor's 500 stock index rose 8.09 to 663.77. The Nasdaq composite index rose 9.33 to 1,148.72, and the American Stock Exchange's market value index rose 1.94 to 561.96.