SAN FRANCISCO -- Shares of IBM ( IBM) were trading at another 52-week high, helped by a broad market rally that has favored large tech stocks.

Big Blue has given investors plenty of reason for enthusiasm this year by aggressively buying back stock, paring pension contributions and emphasizing sales of high-margin software. Chief Financial Officer Mark Loughridge says this trio of tactics will help the 96-year-old tech icon nearly double earnings per share by 2010.

IBM shares were recently trading up 35 cents, about 0.3%, to $119.41, above a high of $119.44 reached on Monday. So far this year, IBM's stock has gained 22% compared to a 9% rise for the S&P 500.

Investors have broadly rallied behind the tech sector this year in the hope that corporate purchases of software and tech gear would insulate them from a housing market downturn and rising oil prices that could dampen consumer spending.

The Vanguard Information Technology ( VGT) exchange-traded fund has risen about 17% this year.

In addition to IBM, the fund includes several marquee tech names trading at or near all-time highs, including Apple ( AAPL), Hewlett-Packard ( HPQ) and Cisco Systems ( CSCO).

Many investors also favor large companies with exposure to international markets that are growing faster than the U.S. economy. And because of the weakening U.S. dollar, sales from abroad are worth more.

Cisco's Chief Executive John Chambers has said that the growth prospects for international sales are the brightest he's ever seen. The Internet gear maker's sales in emerging markets grew 37%, vs. 23% for the U.S. and Canada.

Similarly, IBM's sales in emerging markets grew 32% in the previous quarter.

Further helping the sector, tech stocks have been aggressively buying back their shares. According to Standard and Poor's, technology companies spent nearly $27 billion buying back shares in the first quarter of 2007. That accounted for 23% of the total amount spent on stock repurchases and exceeded all other industries.

Mutual fund manager DWS recently told investors in its ( KTCAX) Technology Fund that tech companies are likely to use the cash hoards sitting on their balance sheets to continue their share repurchase plans. DWS also said that buybacks are attractive because they can provide a "valuation floor" to dampen the effects of a market downturn on tech stock valuations.

IBM has been the most aggressive, buying back $14.6 billion of stock -- about 9% of all shares outstanding -- in the second quarter.

IBM's plans to increase sales of software can help the company's profitability, as software carriers have wider profit margins than hardware and services. Also, the recurring revenue from software licenses can help smooth IBM's revenue if economic growth slows and hardware sales moderate.

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