The Nasdaq composite index rose 50.65 to 4,064.01, and the Standard & Poor's 500 index rose 3.18 to 1,479.13.
The Dow Jones industrial average climbed 62.58 to close at 10,497.74, led by Microsoft, which rose $5.75 to $80.69.
"Today, it's all about Microsoft," said Todd Clark, head of listed trading at WR Hambrecht. "The judge's recent decision leads investors to think that the case will be resolved quickly...and things are more certain than they have been in the past."
Microsoft volume exceeded 80 million shares, twice the stock's average daily volume, which made it the most active stock on the Nasdaq.
The absence of negative earnings warnings also was kind to the technology sector today. "We haven't had a tech bellwether pre-announce, which has helped us," said Bryan Piskorowski, a market strategist at Prudential.
Yet, some say the markets are moving cautiously as the Federal Reserve prepares to meet on interest rate policy next week. "Technology in general is still tentative," said Tony Cecin, head of trading at US Bancorp Piper Jaffray.
"About 1 billion shares of volume on the NYSE and 1.5 billion on the Nasdaq isn't going to blow anyone's socks off," he said. "Everyone is still placing their bets on what happens next Thursday. There's optimism, but it's measured, it's not crazy like it was a few months ago."
At the end of regular trading, Intel closed up 69 cents at $139. The company announced yesterday after the markets closed that it would take a charge to account for a product recall.
The CNET tech index rose 17.15 to close at 2,948.50. Losers edged out winners, with 54 of the 97 stocks in the index falling, 40 rising and three remaining unchanged.
Of the 18 sectors tracked, PC software companies posted the sharpest gains, rising nearly 5 percent. Computer storage makers were the day's largest losers, falling 2 percent.
The $200 million initial offering of Handspring, a maker of personal data devices, recorded significant gains on the Nasdaq. The shares jumped $6.94, or about 35 percent, to $26.94. Volume topped 12 million shares.
Among members of the CNET Tech Index, Broadcom posted respectable gains. Shares in the company rose $4.59 to $171.38 the day after it was added to the S&P 500 index. Banc of America also reiterated its "strong buy" rating on the chipmaker.
Shares of Oracle also had an active day. The stock closed up 16 cents at $86.19 but fell as low as $80.31. The tech giant released earnings yesterday after the bell that fell short of expectations in some of its businesses.
The Philadelphia semiconductor index crawled up 4.56 to 1,269.30, led by chipmaker Advanced Micro Devices, which rose $3.31 to close at $94.56.
Shares of Akamai Technologies jumped $21.38, or almost 23 percent, to $115.38 after a Chase H&Q analyst initiated coverage with a "buy" rating and a $175 to $180 price target.
The initial offering of China Unicom--a wing of China's second-largest telephone company, China United Telecommunications--rose, $2.20, or almost 11 percent, to $22.19 in its first day of trading.
Venture capital firms raised more than $12.4 billion in the first quarter of this year, an 85 percent increase over the same period in 1999, according to a recent study by the National Venture Capital Association.