NEW YORK (CNN/Money) - U.S. stocks rose smartly Monday on strength in tobacco, financial, and aerospace issues but the market's recent rally may face a roadblock Tuesday after Texas Instruments warned about sales and earnings in the fourth quarter.

The Dow Jones industrial average (up 215.84 to 8538.24, Charts), the Nasdaq composite (up 21.81 to 1309.67, Charts), and Standard & Poor's 500 index (up 15.33 to 899.72, Charts) all closed sharply higher, encouraging some investors but again begging the question of whether the rally is sustainable or just a brief break during a long bear market.

"We're all breathing a collective sigh of relief, but as to whether we've reached a turning point ... this may be false hope right now," James Hedges, president and founder of LJH Global Investments told CNNfn's Street Sweep.

"Investors would be misplaced to think that this kind of environment right now -- with these very whippy, volatile markets -- is going to be sustainable," Hedges added. "We've still got a lot of news to get through, with corporate earnings and everything else."

After the close of trade, chipmaker Texas Instruments (TXN: up $0.02 to $17.12, Research, Estimates) reported a third-quarter profit of 11 cents a share, topping forecasts, but also warned that fourth-quarter results won't meet estimates as business will continue to be hurt going forward due to the weakness in the semiconductor sector.

The stock tumbled in after-hours trading.

The report was the latest in an earnings season that has seen many technology companies report a solid quarter, but warn for the quarters ahead. More than a third of the Standard & Poor's 500 report results this week.

Shares of Dow component 3M (MMM: up $3.69 to $129.00, Research, Estimates) rallied Monday after the company reported strong third-quarter results and raised its forecast for the rest of the year.

Shares of Philip Morris (MO: up $2.45 to $42.49, Research, Estimates) boosted the Dow amid a broad tobacco-sector rally. The company reported a stronger third-quarter profit late last week.

Shares of Dow aerospace companies Boeing (BA: up $1.36 to $30.36, Research, Estimates) and Honeywell International (HON: up $1.47 to $24.06, Research, Estimates) also bounced. The stocks were knocked sharply lower Friday when Northrop Grumman (NOC: up $3.23 to $103.95, Research, Estimates) announced that it would need to restate some earnings.

Other Dow stocks that rose: J.P. Morgan Chase (JPM: up $1.30 to $20.27, Research, Estimates), automaker General Motors (GM: up $2.69 to $37.00, Research, Estimates) and techs Hewlett-Packard (HPQ: up $0.89 to $13.98, Research, Estimates) and Intel (INTC: up $0.99 to $15.45, Research, Estimates) also rallied.

"This is more or less a continuation of the October effect," said Tom Schrader, head of listed trading at Legg Mason. "Since about mid-October, we've been rallying and that's traditionally the time you're going to see that. We've had some nice earnings reports in the last week supporting a rally and we're probably going to continue to see that."

"Sentiment had gotten so bad," Schrader added. "People are wanting to start get back in."

A broad range of issues boosted the Nasdaq, with networking, semiconductor and telecom stocks all participating.

JDS Uniphase (JDSU: up $0.28 to $2.27, Research, Estimates), Cisco Systems (CSCO: up $0.42 to $10.95, Research, Estimates), eBay (EBAY: up $3.06 to $63.02, Research, Estimates) and Brocade Communications (BRCD: up $0.69 to $7.45, Research, Estimates) were among the most active advancers.

Shares of business software maker Siebel Systems (SEBL: up $0.27 to $6.47, Research, Estimates) gained after the company and Microsoft agreed to co-develop services for enterprise software customers.

Stocks of major drugmakers were mixed after comments from President Bush on new rules meant to speed access to generic drugs. Generic drugmakers rallied on the news.

Also taking a hit, shares of Microsoft fell after CEO Steve Ballmer said in an interview over the weekend that the company's strong first quarter was an anomaly and not an indication of a sea change for the No. 1 software maker or the tech industry as a whole.

Microsoft's (MSFT: down $0.64 to $52.51, Research, Estimates) stock had rallied Friday, adding momentum to the rest of the market after the company reported strong first quarter revenue that was up 26 percent from the year earlier period. Microsoft also raised its full year forecasts.

The stock's performance is influential for the broader technology sector because it is the Nasdaq composite's most heavily-weighted issue and it is also one of the 30 components that make up the Dow industrials.

European markets closed mixed, while Asian-Pacific stocks finished mostly lower Monday.

Treasury prices fell, pushing the 10-year note yield up to 4.23 percent. The dollar fell against the yen and the euro. Light crude oil futures lost 68 cents to $28.92 a barrel. Gold fell modestly.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by more than 10-to-7 as 1.42 billion shares changed hands. On the Nasdaq, advancers topped decliners by a similar margin as 1.55 billion shares traded.