The Nasdaq rose 228.75, or nearly 7 percent, to close at 3,711.23. It's the index's third-highest percentage gain and second-largest point increase in history.
The Standard & Poor's 500 index gained 47.35, or 3 percent, to 1,477.21. The Dow Jones industrial average rose 218.72 to 11,124.82, led by strong earnings from AT&T and SBC Communications. Procter & Gamble was the biggest loser on the Dow because of a weak earnings report.
Dow component Intel posted strong gains, rising $8.88 to $125.
Microsoft reversed directions from yesterday's dive, climbing $2.75 to $69.38. Justice Department antitrust officials briefed the White House today on their proposed plan to divide Microsoft into two software entities in hopes of sparking competition in the software industry.
The CNET tech index gained 176.09, or 6 percent, to 3,000.82.
Winners swept away losers, with 98 of the 99 stocks in the index rising and one falling.
Of the 18 sectors tracked, semiconductor and telecommunications equipment companies posted the sharpest gains, climbing about 10 percent and 9 percent, respectively. Computer services companies posted the smallest gain, climbing 4 percent.
E-Loan was the biggest percentage gainer on the Nasdaq Stock Market. Its shares jumped $5.28, or 130 percent, to $9.34. Online brokerage Charles Schwab and a group of venture capital firms said they will invest $40 million in the Web-based lending company.
Among members of the CNET tech index, Citrix Systems and DoubleClick posted strong gains.
Citrix rose $11.38, or about 25 percent, to $57.69, while DoubleClick climbed $10.38, or 18 percent, to $67.63.
Shares of optical network equipment maker JDS Uniphase rose $13, or 16 percent, to $93.31. The company reported earnings after the markets closed.
Exodus Communications, the only loser in the CNET tech index, fell $4.13 to $78.38 following yesterday's disappointing earnings report.
The Philadelphia semiconductor index rose 88.81, or nearly 9 percent, to 1,082.45, led by chip designer Rambus, which rose $24.34, or 15 percent, to $186.22.
Contract manufacturer SCI Systems today said revenues and profits shot up in the past quarter partly because of the company's efforts to diversify beyond the PC. Its shares rose $4.75 to $49.88.
Bell Atlantic said today that it may miss its goal of 500,000 high-speed DSL Internet customers by year-end because of slower-than-expected subscriber growth in the first quarter. The company's shares rose $1 to $62.94.