  We present spectral and optical properties of the Hubbard model on a
two-dimensional square lattice using a generalization of dynamical mean-field
theory to magnetic states in finite dimension. The self-energy includes the
effect of spin fluctuations and screening of the Coulomb interaction due to
particle-particle scattering. At half-filling the quasiparticles reduce the
width of the Mott-Hubbard `gap' and have dispersions and spectral weights that
agree remarkably well with quantum Monte Carlo and exact diagonalization
calculations. Away from half-filling we consider incommensurate magnetic order
with a varying local spin direction, and derive the photoemission and optical
spectra. The incommensurate magnetic order leads to a pseudogap which opens at
the Fermi energy and coexists with a large Mott-Hubbard gap. The quasiparticle
states survive in the doped systems, but their dispersion is modified with the
doping and a rigid band picture does not apply. Spectral weight in the optical
conductivity is transferred to lower energies and the Drude weight increases
linearly with increasing doping. We show that incommensurate magnetic order
leads also to mid-gap states in the optical spectra and to decreased scattering
rates in the transport processes, in qualitative agreement with the
experimental observations in doped systems. The gradual disappearence of the
spiral magnetic order and the vanishing pseudogap with increasing temperature
is found to be responsible for the linear resistivity. We discuss the possible
reasons why these results may only partially explain the features observed in
the optical spectra of high temperature superconductors.
