NEW YORK (CNN/Money) - Stocks ended higher Wednesday, thanks to a tech sector rally, rising for a second session after snapping a three-week slump Tuesday.

The tech-laden Nasdaq composite (up 26.14 to 2,046.09, Charts) jumped 1.3 percent. The Dow Jones industrial average (up 37.03 to 10,498.59, Charts) added 0.4 percent and the broader Standard & Poor's 500 (up 5.66 to 1,174.07, Charts) gained 0.5 percent.

Long-term Treasury bonds advanced after tumbling in the previous session; and the dollar weakened after China reignited market talk of a currency revaluation.

Analysts said Wednesday's rally was typical for a market that began the year overvalued, sold off sharply and then became what some see as undervalued.

"The markets are moving to more reasonably reflect expectations for what lies ahead in 2005," said Hugh Johnson, chief investment officer at First Albany.

Market breadth was positive. On the New York Stock Exchange, advancers beat decliners 23 to 9 on volume of 1.6 billion shares. On the Nasdaq, winners topped losers more than two to one on volume of 2.1 billion shares.

But traders were doubtful that the rally would advance much further.

"We'll probably see a few more days of this but that's it. It looks more like an oversold bounce than anything more meaningful," said John Hughes, market analyst at Shields & Co.

Looking ahead, Thursday morning earnings include Caterpillar (Research), which First Call estimates will post earnings of $1.63 per share, up from 97 cents a year ago.

Nokia and Verizon will also report earnings in the morning. Analysts forecast Nokia's (Research) earnings will come in at 23 cents per share, down from 34 cents a year ago. Verizon's (Research) earnings are seen at 64 cents per share, up from 58 cents a year ago.

Microsoft (Research) will report after the bell Thursday, likely earning 33 cents per share, a penny shy of a year ago, according to First Call.

The December read on durable goods orders is also due Thursday, and economists expect orders to have risen 0.8 percent after posting a 1.6 percent gain in November.

The tech sector was particularly buoyant after Texas Instruments (up $1.54 to $22.66, Research) reported earnings that beat Wall Street forecasts. A number of chips rose in sympathy, and the Philadelphia Semiconductor (up 10.19 to 400.06, Charts) index, or the SOX, ended up 2.6 percent.

And No. 2 software maker Oracle (up $0.03 to $13.62, Research) forecast fiscal 2005 and 2006 earnings above current Wall Street estimates due to its recent purchase of rival PeopleSoft.

Earnings boosted a number of other techs, including Electronic Arts (up $5.30 to $62.84, Research), Flextronics (up $1.52 to $13.94, Research) and SBC Communications (up $0.13 to $24.58, Research).

A variety of sectors advanced, with 17 out of 30 Dow components higher at the close of trade.

Johnson & Johnson (up $0.93 to $64.65, Research), Coca-Cola (up $0.44 to $41.68, Research) and Honeywell International (up $0.67 to $35.75, Research) advanced, while fellow Dow component Altria (down $0.45 to $61.84, Research) fell after posting earnings that missed estimates.

Oil fell 86 cents, or 1.7 percent, to settle at $48.78, after falling as much 3.3 percent in early trading on the New York Mercantile Exchange, easing from a high near $50 hit Monday.

Treasury prices were little changed on the session, with the yield on the 10-year note at 4.19 percent. Bond prices and yields move in opposite directions.

In currency trading, the dollar slid versus the euro and yen.

COMEX gold ended the session up $4.80 to $426.90 an ounce, recovering after a two-session selloff.

In global trade, Asian-Pacific markets ended higher, and European markets ended the session flat.