CHICAGO (CNN/Money) - Technology stocks posted strong gains Monday as investors prepared for a big week of earnings announcements, although thin trading volumes indicated that many investors are remaining on the sidelines until they get more clarity regarding the near-term outlook for the sector.

The Nasdaq Composite Index gained 26.10 to close at 1,384.95, according to preliminary results.

Tech shares are likely to be volatile this week as several major technology firms are scheduled to announce their latest quarterly financial results, including Microsoft, Intel, Motorola, Nokia, and eBay. Although many companies have already warned that the most recent quarter had been tainted by the war in Iraq, which they said caused customers to delay making big purchases, investors will pay close attention to any guidance regarding the near-term outlook.

Strength in Microsoft, which trades on the Nasdaq and is also a Dow component, gave a lift to the sector. Tim Smalls, head of trading at Legg Mason, said rumors circulated Friday that Microsoft would warn of weaker-than-expected results. Since those rumors didn't bear fruit, Microsoft (MSFT: Research, Estimates) regained some lost ground, rising 55 cents to $24.75.

Still, trading volumes were razor thin, suggesting buyers aren't fully ready to enter the market.

"You've got a holiday this week and next week, so people are taking a wait-and-see attitude," Small said. "People aren't willing to make a really big bet in front of the earnings [announcements]. They had a move in the market at the beginning of the war, and now everything's settling in a little. People will react to the earnings and the guidance of the companies -- that's what we want to see."

IBM (IBM: Research, Estimates) gained $1.32 to $80.07 ahead of its first-quarter earnings announcement, which the company delivered after the close of markets. The company's shares were down $2.07 in after-hours trade after its first-quarter profits fell short of Wall Street estimates.

Among other large-cap tech issues, Hewlett-Packard (HPQ: Research, Estimates) added 60 cents to $15.90, Intel (INTC: Research, Estimates) advanced 40 cents to $17.16, and Texas Instruments (TXN: Research, Estimates) rose 65 cents, or 4 percent, to $16.88.

Not everyone, however, got to participate in the rally. Three leading Internet stocks -- Amazon.com, Yahoo!, and eBay -- took a hit after an article in Saturday's Barron's said the valuations of the companies may be too high.

Amazon.com (AMZN: Research, Estimates) fell 70 cents to $25.05, Yahoo! (YHOO: Research, Estimates) slipped 8 cents to $24.35, and eBay (EBAY: Research, Estimates) shed 55 cents to $87.74.