The Nasdaq rose 254.41, or 7 percent, to close at 3,793.57. The increase topped yesterday's performance as the largest point gain in the index's history and the second largest in percentage terms.
The Standard & Poor's 500 index added 40.17, or about 3 percent, to 1,441.61.
The CNET tech index jumped 127.46 to 3,032.44, led by shares of VeriSign and Tellabs.
Winners vastly outnumbered losers, with 87 of the 99 stocks in the index climbing, 11 falling and one remaining unchanged.
Of the 18 sectors tracked, e-tailers posted the sharpest gains by rising 16 percent. A study by Boston Consulting Group showed that some companies in the sector are profitable. Communications services companies recorded the day's narrowest gains, climbing nearly 3 percent.
Intel and Microsoft traded strongly on the tech-heavy Nasdaq Stock Market, recording the second- and third-largest volumes behind Cisco Systems. Intel gained $6 to $129, and Microsoft rose $4.69 to $80.56.
Microsoft will launch a new operating system tomorrow for handheld devices as it aims to take market share from Palm, which rose $2.69, or 9 percent, to $31.
Vitria Technology, an e-commerce software provider, was a top gainer on the Nasdaq. The shares jumped $17.38, or 82 percent, to $38.50 as volume topped 4.2 million shares. The company posted narrower-than-expected losses during its first quarter.
Extended Systems posted significant losses on the Nasdaq, falling $9.88, or nearly 20 percent, to $40. The company posted a loss in net income during its third quarter.
Among members of the CNET tech index, Tellabs and VeriSign posted strong gains.
Tellabs rose $6, or almost 14 percent, to $49.31 after reporting strong earnings. VeriSign climbed $28.75, or 26 percent, to $139.50. The company said General Electric will use its e-commerce software.
Inktomi reported earnings after the markets closed, but during regular trading investors bid up the stock 26 percent, or $24, to $116 in anticipation.
The Philadelphia semiconductor index rose 42.71, or nearly 5 percent, to 1,052.59, led by chip equipment maker Novellus, which gained $7.19, or 13 percent, to $60.69. Chip designer Rambus fell $8.94 to $152.
America Online, IBM, Intel and Teradyne are among the shares to watch tomorrow, as all reported earnings today after the markets' close.