"The pessimism is kind of reaching a crescendo," James Oberweis, portfolio manager at Oberweis Asset Management, told Reuters. "The sellers are pretty well played out, stocks are back to being reasonably valued, and there's quite a bit of cash on the sidelines that doesn't want to miss the rally."
Tuesday's rally lifted virtually all technology sectors including the downtrodden Internet issues.
Yahoo moved up 38 cents to $16.02, while AOL Time Warner and Amazon.com moved up 54 cents and 83 cents a share, respectively, to $40.01 and $12.01.
eBay gained $1.47 to $39.45, and CMGI closed up 49 cents to $2.40.
Sonus Networks shot up $3.48 to $19.49 ahead of its earnings report. Analysts are expecting the company to beat estimates and give bullish projections.
RSA Security rose $3.31 to $26.31 after it matched earnings expectations for the first quarter and announced a deal with a major cell phone maker.
Microsoft gained $2.53 to $59.68, Oracle picked up 92 cents to $14.97, and Sun Microsystems closed up $1.61 to $14.65.
Getty Images gained $4.07 to $19 even though it warned its first-quarter results wouldn't meet Wall Street's expectations and said all previous financial projections aren't accurate.
Cypress Semiconductor also gained ground, adding 94 cents to $16.34, despite warning it will miss lowered first-quarter estimates.
Intel rose $1.55 to $24.75, Advanced Micro Devices closed up $1.62 to $21.32, and IBM rose $2.66 to $98.66.
Among widely held PC issues, Dell Computer jumped $1.37 to $26.26, Compaq Computer gained $1.24 to $17.35, Apple Computer rose $1.50 to $22.04, and Gateway finished up 74 cents to $15.39.
Staff and Reuters contributed to this report.