If you believe the newspaper reports, the 49.57-point rise in the Dow Jones industrial average last Tuesday was caused by "millions of dollars of new money coming into the market," bargain hunters looking for stocks that had fallen in price right before Memorial Day and a strong surge in IBM's shares.

One out of three isn't bad. IBM's stock price did rise sharply, thanks largely to a positive article over the holiday weekend in Barron's magazine, and helped push up the whole market.

But bargain hunting? What sort of loony investor would be looking for bargains after a pullback of just 35 points in the Dow when the prices of most stocks were still at all-time highs? And millions of dollars in new money coming into the market? How could that possibly be the reason when trading volume on the New York Stock Exchange was a puny 137.4 million shares?

The better explanation for what happened last week was program trading -- that hated practice that always gets blamed when the stock market is in a tailspin but never gets credit when the market is going up. I'm here to correct that injustice.

Program trading, of course, doesn't happen in a vacuum. But moles on the floor of the Chicago Mercantile Exchange say they are at a loss to explain why Prudential-Bache Securities Inc., Goldman Sachs & Co. and, especially, Shearson Lehman Hutton Inc. suddenly started buying stock index futures contracts heavily last Tuesday morning. By the end of the day, that buying had forced a lot of others into the market and had helped the Dow make headlines around the world as it closed in on the 2900 level.

Nothing positive happened over the Memorial Day weekend that would have prompted the futures buying. The nation's economy didn't improve. Interest rates didn't drop. The president didn't find a painless solution to the savings and loan problem.

Nevertheless, those three investment firms came into the stock index futures market Tuesday, blank checks in hand, ready to bid up prices. And once futures started to rally, the prices of the underlying stocks began rising.

"This was a futures-led rally," said a futures trader on the Chicago Mercantile Exchange. "We were stronger typically before the stocks {in New York} were stronger."

The figures bear that out. The Dow was up less than 8 points after 30 minutes of trading, even though futures were surging. By 11 a.m. New York time, the Dow was up a modest 14 points. And at 3 p.m., the Dow still had an unremarkable gain of just 23 points.

In the next hour, however, the Dow rose another 27 points to finish with a gain of 49.57 points.

That extra 27 points was tacked on after bond futures contracts stopped trading for the day. Over the past few weeks, stock futures traders have waited for the last hour of trading -- when competition from bond futures ceases -- before staging their big rallies.

"It was out of the blue," said another Chicago futures trader about the entire Tuesday rally.

The best explanation for the futures surge that either of these two traders could offer is this: With the nation's economic picture muddled (at least to them), Wall Street traders have been trying to profit from short-term swings in futures and stock prices. When the stock market fell before the Memorial Day weekend on light volume, the big futures traders felt there was an opportunity to push both the futures and stock markets higher.

And that's what they did on Tuesday, after the holiday.

What all this gobbledygook means to the average investor is simple. Stock prices have been rising because Wall Street traders are trying to earn a living by taking advantage of short-term swings in the market.

It doesn't mean that stock prices are rising for any "real," or fundamental, reason. If it turns out that the nation's economy is really as weak as many people believe, or if interest rates suddenly rise unexpectedly, the traders who've been egging the market on won't be around to save it.

"Everyone is very short-term oriented," said a source at the Merc, who also happens to work for one of the firms that bought futures heavily on Tuesday. What is in his firm's report on the outlook for the stock and futures markets over the longer term? The source said he didn't know. He hadn't read the report.

Over the past few weeks, IBM has been offering added incentives and discounts to customers that install mainframe computers by June 30, according to the Gartner Group, a Stamford, Conn.-based research firm. The push is apparently intended to boost second-quarter revenue at the computer giant. Gartner said last week that IBM has been offering some straight discounts for customers that agree to a pre-June 30 installation (so the revenue shows up in the second quarter), but most of the incentives won't hurt IBM's profit margins.

John Crudele is a columnist for the New York Post.