A surge in technology shares led a moderate rally on Wall Street as investors sought bargains, picking up interest rate-sensitive stocks that may have been oversold in the market's latest downturn.

Investors bought tech shares, small-cap stocks and financial companies despite the fact they were the most vulnerable to the impact of a potential rate hike, which could come at the next Federal Reserve meeting in June. Interest rate fears sent the three major indexes into a 3 percent plunge during the previous three sessions.

Analysts said the unusual buying choices represented bargain hunting by some investors but noted that volume was much lighter than during the three-day sell-off.

"Right now, you're seeing the markets pause a bit. I think we're reevaluating the sell-off to see if it's been an overreaction to the interest rates," said Stephen Sachs, director of trading for Rydex Investments.

The Nasdaq composite index gained 35.28, or 1.9 percent, to 1931.35, after dipping below the 1900 mark at Monday's close. The Dow Jones industrial average closed above 10,000, one day after slipping below that mark for the first time since December. The Dow gained 29.45, or 0.3 percent, to 10,019.47. The Standard & Poor's 500-stock index rose 8.33, or 0.8 percent, to 1095.45.

Among the S&P 500's 10 industry groups, the index of technology companies contributed more than one-third of the benchmark's advance. Texas Instruments rose 71 cents, to $26.34. Yahoo jumped $2.20, to $53.53.

Cisco Systems climbed 63 cents, to $22.25. Intel, the world's largest semiconductor maker, rose $1.22, to $27.77. The company increased inventories to the highest levels since 2001 in a bet that spending on electronics will rise.

May Department Stores, operator of Lord & Taylor, Filene's, Hecht's and Foley's stores, fell 86 cents, to $27.92, after its earnings missed Wall Street estimates by a penny a share.

Other Indicators

* The New York Stock Exchange composite index fell 50.86, to 6300.96; the American Stock Exchange index rose 1.56, to 1165.00; and the Russell 2000 index of smaller-company stocks rose 10.81, to 548.67.

* Advancing issues outnumbered declining ones by 4 to 1 on the NYSE, where trading volume fell to 1.53 billion shares, from 1.91 billion on Monday. On the Nasdaq Stock Market, advancers outnumbered decliners by 5 to 2 and volume totaled 1.62 billion, down from 1.88 billion.

* The price of the Treasury's 10-year note rose $3.44 per $1,000 invested, and its yield fell to 4.75 percent, from 4.80 percent on Monday.

* The dollar fell against the Japanese yen and rose against the euro. In late New York trading, a dollar bought 113.25 yen, down from 113.72 late Monday, and a euro bought $1.1864, down from $1.1867.

* Light, sweet crude oil for June delivery settled at $40.06, up $1.13, on the New York Mercantile Exchange.

* Gold for current delivery fell to $376.90 a troy ounce, from $378.30 on Monday, on the New York Mercantile Exchange's Commodity Exchange.