CHICAGO (CNN/Money) - Technology stocks rallied Tuesday, as a few bargain hunters sparked another round of short sellers covering their positions.

In a day with little news to move the markets one way or the other, bargain hunters picked up where they left off last Friday. Trading was light, however, due in part to the blizzard that struck the East Coast during the weekend. Traders have also noted that institutional investors have been keeping to the sidelines until more clarity emerges from the Iraq situation.

"There's very little institutional investing," said Matthew Ruane, head trader at Gerard Klauer Mattison. "There's more short covering going on."

While the latest news regarding Iraq indicated that a war may not be as imminent as initially anticipated, there haven't been any developments that suggest any sort of resolution is at hand. With that in mind – and given the economic and corporate outlook – traders have noted that the current rally will likely be short-lived.

"I don't believe in the rally," Ruane said. "There's no real rosy outlook for the next couple of quarters. Until proven wrong, I think the market trades sideways, and it shouldn't be trading as dramatically higher as it has in the last two days. It's a little too much for me too soon."

The Nasdaq Composite Index gained 36.37, or 2.78 percent, to close at 1,346.54. Among other tech indexes, the Morgan Stanley 35 rose 11.33 to 292.36, while the Amex Technology Index climbed 17.95 to 518.40.

Blue-chip tech stocks continued to pick up steam, with IBM (IBM: Research, Estimates) up $1.88 to $79.33, Intel (INTC: Research, Estimates) climbing 56 cents to $16.71, and Microsoft (MSFT: Research, Estimates) gaining 81 cents to $24.96. Microsoft's 2-for-1 stock split took effect Tuesday.

Computer hardware stocks posted strong gains, despite market research firm Gartner Group's forecast of only 4.8 percent growth in first-quarter worldwide PC shipments. Gartner cited geopolitical and economic uncertainties as factors contributing to the slow growth. The firm anticipates a pickup in shipments by the end of the year.

Among computer stocks, Dell (DELL: Research, Estimates) rose 72 cents to $26.49, Hewlett-Packard (HPQ: Research, Estimates) added 65 cents to $18.44, and Apple Computer (AAPL: Research, Estimates) advanced 60 cents to $15.27.

Elsewhere, Cisco Systems (CSCO: Research, Estimates) climbed 63 cents to $14.31. The computer networking company launched a $100 million to $150 million global advertising campaign.

Online financial-data firm Mutlex.com (MLTX: Research, Estimates) shot up $2.71, or 59 percent, to $7.29 after Reuters Group agreed to acquire the 94 percent of the company it doesn't already own.