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With about an hour left to the trading day, the tech-laden

Nasdaq Composite Index was jumping 3.7% and sending many pockets of the tech world markedly higher.

The Internet sector was helping to lead the gains, reflected by the 7.3% jump in

TheStreet.com Internet Sector

index.

Internet advertising company

DoubleClick

(DCLK)

was recently 15.9% higher to $15 after the online advertising company announced it had signed a partnership agreement with streaming media company

iBEAM Broadcasting

(IBEM)

. iBEAM moved up 28.6%, or 8 cents, to 36 cents.

But not all the gains were pegged to news. Media delivery provider

RealNetworks

(RNWK) - Get RealNetworks, Inc. Report

was up 14.8% to $15.90, for example, and Internet security provider

TheStreet Recommends

Network Associates

(NETA)

was tacking on 15.1% to $15.90.

Bob Basel, director of listed trading at

Salomon Smith Barney

, said he sees "a short squeeze" at play in today's tech rally. People who borrowed stocks on the gamble they would go down -- and could be replaced more cheaply -- are being forced to buy today and forcing their price up. It's "shorts throwing in the towel," he said.

TheStreet.com

recently took a look at the impact

shorts have on the market.

Tech stocks and the general market have been on the trajectory higher since early April, in large part inspired by a belief the recent series of rate cuts from the

Federal Reserve will help fuel an economic recovery.

Doug Myers, vice president of equity trading at

IJL Wachovia

said he saw short squeezes today in some stocks, but didn't think the moves were driving the entire tech rally. Investors today, he said, seem to be "pining for those go-go days of a couple years ago" and throwing their money back into tech stocks.

Chip stocks, which have moved sharply higher since early April, were riding the tech wave. The

Dow Jones U.S. Semiconductor Index

lately gained 4.7%, while the closely watched

Philadelphia Stock Exchange Semiconductor Index

posted a 5.1% rise.

At the front of the semiconductor pack was

PMC-Sierra

(PMCS)

, climbing 10.9%, or $4.17, to $42.83.

Applied Micro Circuits

(AMCC)

rose 8.6% to $25.52, while

National Semiconductor

(NSM)

added 7.5% to $28.07.

Several big-name chip companies were rising despite

having their earnings forecasts lowered this morning by

Merrill Lynch's

Joe Osha. He cut his earnings targets on

Intel

(INTC) - Get Intel Corporation Report

,

Advanced Micro Devices

(AMD) - Get Advanced Micro Devices, Inc. Report

and

Micron Technology

(MU) - Get Micron Technology, Inc. Report

.

The software sector also posted large gains. The

Dow Jones U.S. Software Index

was gaining 4.3%.

Rational Software

(RATL)

was up 14.6% to $27.40, information management software maker

Interwoven

(IWOV)

was 15% higher to $21.99 and e-business solution provider

i2 Technologies

(ITWO)

was gaining 12.7% to $27.

Networking giant

Cisco

(CSCO) - Get Cisco Systems, Inc. Report

jumped 10.7% to $22.35, and the

American Stock Exchange Networking Index

was moving 4.6% higher.

Server maker

Sun Microsystems

(SUNW) - Get Sunworks, Inc. Report

rose 12.5% to $22.42. And the

Philadelphia Stock Exchange Box Maker Index

, made up of computer manufacturers, rose 2.9%.