Despite a drumbeat of bad economic news, the market is up — almost 11 percent in the last few weeks. Junk bonds, those risky corporate I. O. U.'s, are rallying. The value of financial shares, bank loans, tricky credit derivatives — up, up, up. Many on Wall Street, the epicenter of the credit mess, seem to think that the worst is . For the first time in months, analysts and executives sound upbeat again. Many of them see a broad, recovery in both the economy and the financial markets coming in the second half of this year, a prediction some market strategists call at best. For now, policy makers are echoing the mood on Wall Street. Treasury Secretary Henry M. Paulson Jr. said in an interview with Bloomberg Television on Thursday that "we are closer to the end of this problem than we are to the beginning." A report from the Bank of England, meantime, concluded that mortgage , which have been at the heart of the financial troubles, probably have too far. The central bank said prices of such securities should "improve in the coming months." Financial stocks and the broader market on Thursday as the dollar strengthened and oil prices fell for the third day in a . The Standard & Poor's 500-stock index closed up 1.7 percent, to 1,409.34 points; the Dow Jones industrial average notched a 189.87-point gain, to 13,010; and the Nasdaq composite jumped 2.8 percent. Another day or two like that, and those market will be in the black for the year.