This session's rally is proof that a little weaker-than-expected economic data can go along way. But would savvy investors kid themselves into thinking that the April retail salesnumber is good enough news to change the negative sentiment that has embedded itself into the market? According to Wall Street insiders, the bears are alive and kicking. Just take a look a volume.

This morning, the

Census Bureau

said April retail sales declined 0.2%, compared with a 0.4% increase forecasted by economists in a

Reuters

poll. The number, which was the first decline since August 1998, sparked what would appear to be a strong rally compared to yesterday's big losses for both the

Dow Jones Industrial Average and the

Nasdaq Composite Index. But investors can't look only to point increases to gauge market sentiment. Volume, too, indicates whether buyers are confident that they will rake in returns rather than chalk up losses.

"We had a benign, or friendly retail sales number this morning," said Brian Conroy, head of listed trading at

J.P. Morgan

, referring to this morning's rally. "And we have a situation where many institutions are sitting on cash reserves and are looking for a reason to put money back in. But we're not seeing a lot of conviction from institutions, so I personally think we'll see a one-day, two-day rally and then a lower trend."

Lately, the Nasdaq was climbing 74, or 2.2%, to 3459, after losing 11% during the previous three sessions.

In Nasdaq trading,

Applied Materials

(AMAT) - Get Report

pushed itself into positive territory, lately up 3/4, or 0.9%, to 85 3/8. Despite posting second-quarter earnings that were in line with expectations and strong new orders, the chip equipment maker fell lower this morning. So why, when other tech blue-chips are rallying, would Applied Materials not be surging?

"It could be that everyone wanted blowout numbers for earnings and revenue," said Brian Gilmartin, portfolio manager at

Trinity Asset Management

. "But the fact is, analyst were raising the expectations for Applied Materials for the past month. There was a lot of optimism built into the stock already."

Elsewhere in tech, the

Philadelphia Stock Exchange Semiconductor Index

, which includes Applied Materials, was charging up 5.2%. Intel was making a comeback, up 7 11/16, or 7.3%, to 113 3/4, after motherboard woes left the stock bludgeoned during yesterday's session.

Investors were getting a stronger signal from telecom/wireless stocks, after a

Motorola

(MOT)

downgrade from

Salomon Smith Barney

yesterday left the sector in a slump. Motorola was on the upside, advancing 4 7/16, or 5.1%, to 91 3/16. The

Nasdaq Telecom Index

was climbing 1.6%.

TheStreet.com Internet Sector

index was adding 23, or 2.8%, to 830, with

Lycos

(LCOS)

contributing to the pop.

Lately, the Dow was up 151, or 1.5%, to 10,519, with strength from tech components

Hewlett-Packard

(HWP)

and

IBM

(IBM) - Get Report

.

Today rally has shoved some of those "modest" sectors into the spotlight. The fizzle of the tech craze left investors looking for relatively inexpensive areas of the market to make a buck and found utilities and natural gas stocks as their answer.

The

American Stock Exchange Natural Gas Index

has rocked to an all-time high today, up 6, or 3%, to 192, using

Enron

(ENE)

and

Williams

(WMB) - Get Report

as fuel.

The

Dow Jones Utility Average

lifted 2.1%.

The

Philadelphia Stock Exchange Oil Service Index

was heating up to a record intraday high of 125.21. The index, which includes

Schlumberger

(SLB) - Get Report

, was still up 3, or 2.2%, to 125.

Despite fears of a 50-basis-point hike, the interest-rate-sensitive financials were climbing. The

American Stock Exchange Broker/Dealer Index

was gaining 1.3%. Dow component

J.P. Morgan

(JPM) - Get Report

was advancing 4 3/8, or 3.6%, to 127.

Despite all sectors seemingly on the upside, market pundits still lack optimism due to the light volume. "You could pretty much take a snapshot of the screen as far as the volume goes," said Arthur Hogan, chief market strategist at

Jefferies

. "The key is volume, which will remain anemic until the Fed meeting on Tuesday. Everything is strong, its your classic snapback rally. But there's not really any credence in the rally until we get all the players back in the game."

The broad

S&P 500 was up 19, or 1.4%, to 1402, while the small-cap

Russell 2000 was adding 9, or 1.9%, to 483.

Market Internals

Breadth was positive on both the Nasdaq and the Big Board on very little volume.

New York Stock Exchange:

1,872 advancers, 899 decliners, 568 million shares. 49 new 52-week highs, 45 new lows.

Nasdaq Stock Market:

2,371 advancers, 1,380 decliners, 814 million shares. 22 new highs, 70 new lows.

For a look at stocks in the midsession news, see Midday Stocks to Watch, published separately.