NEW YORK (CNN/Money) - U.S. stock markets gained Tuesday, as a technology-fueled rally propelled the Nasdaq and gave the sluggish broader market a leg up.

The Nasdaq composite (up 19.77 to 1,994.15, Charts) added 1 percent, after having spent the morning and early afternoon near unchanged.

The Dow Jones industrial average (up 23.60 to 10,395.07, Charts) added 0.2 percent and the Standard & Poor's 500 (up 4.11 to 1,134.41, Charts) index added 0.35 percent. Both traded in negative territory throughout the morning and early afternoon.

Markets were jittery and trending toward the downside throughout the morning and early afternoon, but a technical breakthrough for the Nasdaq allowed it to stage a comeback in the afternoon. The upward pressure spread over to the broader market, although the Dow's gains were limited by weakness in Wal-Mart and a few other issues.

Networking, Internet, and semiconductors all fueled the tech recovery.

Tom Schrader, managing director of U.S. equity trading at Legg Mason, said that the session's turnaround marked just a technical bounce within a trading range that the market has been stuck in for the last few weeks.

Beyond Tuesday's session, he said the market remains focused on the two key events next week, in particular, the Fed.

Next Wednesday, June 30, will bring the conclusion of the Federal Reserve's policy-setting meeting. While the central bank is largely expected to lift the overnight bank lending rate by a quarter-percentage point, there is still some concern as to what the Fed will say in its statement and what it might mean if the Fed were to raise rates by more than a quarter-percentage point.

June 30 also marks the day of the expected transition of power in Iraq and there is some concern that this might bring a new wave of violence.

However, for the time being, "the market is going to be choppy until we see what happens with the transfer of power in Iraq and the interest rate hike," said Peter Green, a market analyst at MKM Partners.

Wednesday morning brings quarterly earnings from FedEx (FDX: Research, Estimates). The package delivery company is expected to have earned $1.34 per share, up from 92 cents a year ago.

There are no economic data due until Thursday, which brings reports on durable goods orders and new home sales for May.

Intel (INTC: up $0.52 to $28.04, Research, Estimates), Sun Microsystems (SUNW: up $0.15 to $4.24, Research, Estimates), JDS Uniphase (JDSU: up $0.38 to $3.58, Research, Estimates) and Cisco Systems (CSCO: up $0.35 to $23.22, Research, Estimates) were among the Nasdaq's biggest gainers.

Shares of PalmOne (PLMO: up $7.90 to $29.36, Research, Estimates) soared nearly 37 percent after the maker of handheld computers reported fiscal fourth-quarter profit that topped estimates and reversed a loss a year earlier, partly due to strong sales of its combined mobile phone and digital organizer. The company also boosted its fiscal first-quarter and full-year earnings per share and revenue outlook.

Clothing retailer Galyans Trading Company (GLYN: up $5.58 to $16.68, Research, Estimates) rallied more than 50 percent after the company agreed to a buyout offer from Dick's Sporting Goods (DKS: up $5.70 to $34.30, Research, Estimates) worth about $305 million in cash.

Both Morgan Stanley (MWD: up $0.90 to $52.15, Research, Estimates) and Goldman Sachs (GS: up $1.81 to $90.60, Research, Estimates) reported fiscal second-quarter earnings that grew from a year earlier and surpassed analysts' expectations. Initially, the stocks had seen little response. But as the market recovered, the stocks turned higher.

Gains in economically sensitive issues supported the Dow, with Caterpillar (CAT: up $1.67 to $76.65, Research, Estimates), 3M (MMM: up $2.22 to $89.50, Research, Estimates) and Honeywell (HON: up $0.50 to $36.76, Research, Estimates) all rising. However, the blue chip average's advance was limited by weakness in a few components.

Dow component Wal-Mart Stores (WMT: down $0.87 to $54.06, Research, Estimates) fell 1.6 percent after a federal judge certified a class-action lawsuit against the company that alleges it discriminated against women.

Dow component DuPont (DD: down $0.35 to $44.00, Research, Estimates) recovered from earlier losses, but remained weaker along with others in the chemical sector. A two-year old investigation into alleged price-fixing by chemical makers has widened into a global probe, the Wall Street Journal reported Tuesday.

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Market breadth was positive and volume showed improvement from recent weeks. On the New York Stock Exchange, where 1.37 billion shares changed hands, advancers edged decliners eight to seven. On the Nasdaq, gainers beat losers by nine to seven on volume of 1.65 billion shares.

Treasury prices fell. The 10-year note lost 7/32 of a point in price, pushing the yield up to 4.71 percent from 4.68 percent late Monday. Treasury prices and yields move in opposite direction. The dollar gained versus the euro and the yen.

Among commodities markets, NYMEX light sweet crude oil futures gained 48 cents to $38.25 a barrel. COMEX gold gained $1 to settle at $395.50 an ounce.