The Nasdaq composite index rose 51.01 to 3,736.53, and the Standard & Poor's 500 index climbed 10.69 to 1,448.79. The Dow Jones industrial average rose 89.01 to 10,695.96.
The Commerce Department reported that single-family home sales fell 3.7 percent in June as the number of homes sold reached a level not seen since December 1997. The 829,000 homes sold during the month was nearly 13 percent lower from the 948,000 homes sold in June of last year.
"The increase in the number of homes for sale in June indicates that builders may have to curb single-family housing starts in the months ahead," wrote Merrill Lynch economist Karen Dexter in a report.
Investors interpreted the report as further evidence that the economy is cooling, which could convince the Federal Reserve to leave interest rates untouched when it meets later this month.
"The ping-pong ball keeps going back and forth in terms of what the Fed is going to do," said Tony Cecin, head of trading at U.S. Bancorp Piper Jaffray.
"Tech stocks have been beaten up over the past few days," he said. "The good (housing) number is leading people to do some bargain hunting in the sector."
The CNET tech index climbed 78.24 to 2,775.24. Advancers outpaced balanced, with 70 of the 97 stocks in the index rising, 22 falling and five remaining unchanged.
Of the 18 sectors tracked, networking equipment makers posted the strongest gains, surging nearly 8 percent. Wireless companies were the day's biggest losers, sliding 2 percent.
Siebel Sytems gained $13.88, or 10 percent, to $153.50, while Avici Systems, a maker of high-capacity data routers, surged $29.50, or 27 percent, to $137. The company went public last Friday.
Vignette, a developer of e-commerce software, rose $4.94, or 17 percent, to $34 after making a marketing deal with consulting firm Arthur Andersen. CNET Networks, publisher of News.com, owns a stake in Vignette.
One the downside, shares of Dell Computer took a hit after U.S. Bancorp Piper Jaffray cut the stock from "strong buy" to "buy" on growth concerns. Dell fell $1.56 to $40 on a volume of 32.2 million shares, making it the most actively traded stock on the Nasdaq today.
"While we expect Dell to continue to deliver on the bottom line," wrote analyst Ashok Kumar in a report, "we are skeptical that the company will be able to meet the 30 percent revenue growth expectations on a sustainable basis."
Kumar noted sluggishness in notebook and server sales, as well as slow overseas sales as areas of concern.