The

Fed

raises rates, the

Nasdaq

rallies.

That pretty much sums it up, though the Nasdaq appeared to be following the

Dow

higher, not necessarily rejoicing over another rate hike. The Dow posted a 227-point gain, carrying the Nasdaq up 101.70 points. The Nasdaq was near unchanged around the time the Federal Reserve raised interest rates by a quarter-point, a move that was widely anticipated. (Check out

James Cramer's

take on the action in a recent

column.)

Tuesday morning, the Nasdaq traded as low as 4467.53 in follow-through weakness from Monday's slide before staging its late charge. Buyers emerged at roughly the same 4455.10 low from March 16. The tech sector showed little initial reaction to the fifth rate hike in less than a year. But buyers began to emerge as gains in the Dow were extended.

TheStreet.com Internet Sector

index closed up 45.96, or 3.9%, at 1230.79. It reached a low of 1142.22 early in the day, nearly matching its March 16 low of 1135.31.

TheStreet.com New Tech 30 finished up 19.95, or 2.6%, at 781.17.

Leading the charge were some traditional Internet names.

Yahoo!

(YHOO)

finished up 19 23/32, or 12%, at 191 3/4. Yahoo! entered a pact with

Palm

(PALM)

whereby registered Yahoo! users will have access to Yahoo! Mail, Yahoo! Messenger and customized preferences from My Yahoo! pages on their Palm handheld computers.

Amazon.com

(AMZN) - Get Report

TheStreet Recommends

closed up 8 3/16, or 13%, at 72 3/8. The stock may actually have benefited from the

Barron's

piece over the weekend that suggested many Net companies, including many smaller e-commerce outfits, would be burning through their cash within the next year, thus eliminating the competition for Amazon. Companies like

CDnow

(CDNW)

and

ShopNow.com

(SPNW)

were prominently mentioned in the article, though both have indicated they have ample funds.

Amazon's gains also may reflect hopes that a congressional panel will recommend an extension on the moratorium on new Internet taxes. And yesterday, Amazon announced a deal with

Kozmo.com

to deliver some Amazon products to its customers within an hour using Kozmo's bicycle fleet. The stock may also be seeing a short squeeze after recent weakness.

eBay

(EBAY) - Get Report

, which has been all over the place in the past week, closed up 18 3/8, or 9%, at 214 1/2. There are still rumors that the company will come up with some type of partnership with Yahoo!.

We mentioned a number of companies that were disputing the

Barron's

story about Internet burn rates and can add one more company to that list. Tuesday afternoon,

Digital Island

(ISLD)

pointed out that the article omitted from its calculation $740 million that the company recently raised through an offering.

Barron's

had the company burning through its money in three-and-a-half months, though the

Barron's

report was based on fourth-quarter revenue and expenses and for the most part did not include money that was raised since the first of the year. Digital Island finished up 3/16 at 70 1/4, though it traded as low as 65 3/4.