They gave a rally. And nobody came.

The stock market busted out of its recent doldrums with a strong advance in all major indices, but the broad strength isn't convincing due to another day of mediocre volume on the

New York Stock Exchange and the

Nasdaq Stock Market.

The broad market averages, especially the small-cap and tech-focused indices, were all supported today after this morning's release of a weaker-than-expected retail sales report. The

Nasdaq Composite Index

gained 114.85, or 3.4%, to 3499.58; the

Russell 2000 was strong, up 15.11, or 3.2%, to 489.39, and the

Dow Jones Industrial Average rose 178.19 to 10545.97, or 1.7%. The

S&P 500 was up 24.76, or 1.8%, to 1407.81.

A few attributed today's rally to investors exhaling after seeing the 0.2% drop in retail sales in April, first since August 1998, this morning. However, with the Comp not too far off April 14's closing low of 3321.29, the report was merely a catalyst; it's not changing anybody's expectations about the

Fed, as most still expect a 50-basis-point hike Tuesday.

"This is a healthy rally making up for yesterday's debacle -- this is the trading pattern we're in," said Matt McDermott, block trader at

Cantor Fitzgerald

.

Perhaps mindful of recent head-fake rallies, initially the uptick looked like something St. Jude would appreciate --

a lost cause -- as the broad averages gave back most of their gains in the early going. But stocks proved resilient, as investors stepped in to take advantage of the recent woes by buying across the board, but especially in the semiconductors, the banks, and the commodity-related stocks.

The broad strength is perhaps the market's way of saying it may have overreacted in recent days in thinking the Fed was not only going to raise rates, but that it was going to unleash hell on the financial markets. Most economists believe the Fed will hike the

fed funds rate 50 basis points to 6.5% Tuesday, but some economists have forecast fed funds will reach 7.5% by the end of the year, and that frightened some investors.

Strength abounded across the technology sectors, including the likes of big-cap Nasdaq stalwarts such as

Intel

(INTC) - Get Report

, which busted out, gaining 9% after stinking things up for the better part of the week. Recently battered

Cisco

(CSCO) - Get Report

was also stronger, gaining 1 9/16 to 60 1/4 on 52.6 million shares, making it the day's most active. Dow components such as

Hewlett-Packard

(HWP)

and

IBM

(IBM) - Get Report

were strong, gaining 3.7% and 1.7%, respectively.

It was a strong day for chip stocks, although

Applied Materials

(AMAT) - Get Report

didn't initially rally after reporting earnings after the close yesterday. Applied Materials finished the day up 1 1/16 to 85 1/4, while several other major chip names posted strong gains.

Micron Technologies

(MU) - Get Report

surged 15%, and

Motorola

(MOT)

leapt 5.8%.

Very few sectors were left out of the action today. Internet stocks were better;

TheStreet.com Internet Sector

index rose 26.38, or 3.3%, to 834.05, led by the likes of

Lycos

(LCOS)

, which rose 19%, and

Check Point Software

(CHKP) - Get Report

, gaining 7.4%.

Among financial names,

Citigroup

(C) - Get Report

was up 4.4%;

Wells Fargo

(WFC) - Get Report

was strong, gaining 2.2%, and regional banks such as

Summit Bancorp

(SUB) - Get Report

, were also moving well. Summit finished up 2.5%, and the

Philadelphia Stock Exchange/KBW Bank Index

gained 2.8% today.

Prelude to an Advance?

Keeping in mind the strong advance in interest-rate-sensitive sectors today, such as banks, brokerages and transports, today's action may be a prelude to Tuesday afternoon, if the Fed does what the market wants -- or expects.

Right now, that's a 50-basis-point hike in the fed funds rate, and while there's still some sentiment among folks that such a hike could potentially signal the end of the Fed's tightening actions, traders generally acknowledge that the panel will probably not be finished raising short-term interest rates. That may keep a lid on broader averages, even if it does result in a quick relief rally.

"If we see 50 next week, I think they'll say that the rate hike was built in, and we should see a rally," said McDermott. "But it could be short-lived. Ultimately higher rates are not a good sign, at least for consumers and business, and even if we push higher this bull market could start to fade away through the summer."

The market's recent ebb and flow has been closely tied to morning economic reports, such as the recent

Employment Cost Index

, and the

productivity and unit labor costs

release. The data are also somewhat responsible for inhibiting volume.

Investors are playing the "we're waiting for the (fill in the blank)" game, and they'll continue to sound that party line with tomorrow's

Producer Price Index release and Tuesday's double-whammy of the

Consumer Price Index and the 2 p.m.

Federal Open Market Committee meeting.

Lots of Cash Ready to Go to Work

"In the last couple weeks, it feels like everybody became a macro economist," said Jon Olesky, head of block trading at

Morgan Stanley Dean Witter

. "Now, there's been serious deterioration in the macro picture, but I think the result of people being concerned about the environment, in the last two to three weeks managers raised cash."

It's hard to say whether they'll start using it after the Fed meeting, however. Most would still judge stock valuations as too high. When the market resembled a block party, it was easy to ignore, but now that it's turned into a

New York Knicks

-

Miami Heat

slugfest, it's harder to reconcile. Which means institutions might not be diving back into the market just yet.

"We're starting to see opportunities here and there," said Robert Cummisford, portfolio manager of the

Kent Small Company Growth Fund

. "But we're

buying into names we like that were at higher levels, but there's not necessarily a bad thing in doing that. There's a lot of people guessing there will be some kind of sigh of relief

after Tuesday but that doesn't necessarily clear the future of any problems."

The oil stocks -- oil exploration and production, as well as the oil-service companies, gained sharply today, on the back of another jump in oil prices. Crude oil futures closed at $29.26 a barrel today, levels not seen since mid-March, while the bulk of the market has been focused on tech's gyrations.

Schlumberger

(SLB) - Get Report

was up 1.6% today,

Halliburton

(HLB)

gained 2.4%, while oil service names such as

Chevron

(CHV)

rose 2.8% and Dow component

ExxonMobil

(XOM) - Get Report

gained 1 5/8 to 82 5/8.

Other commodity-related indices were stronger, including the

S&P Chemical Index

, up 2.6%, the

American Stock Exchange Natural Gas Index

, which rose 3.7%, and the

Morgan Stanley Commodity Related Equity Index

, up 1.3%.

The

Dow Jones Transportation Average

was strong, gaining 38.22 to 2901.39, or 1.3%, while the

Dow Jones Utilities Average

was up 2.5%.

Market Internals

Breadth was strong on mediocre volume.

New York Stock Exchange

: 1,999 advancers, 933 decliners, 957.1 million shares. 62 new highs, 67 new lows.

Nasdaq Stock Market

: 2,522 advancers, 1,481 decliners, 1.348 billion shares. 31 new highs, 109 new lows.

For a look at stocks in the news, see the Company Report, published separately.