(Solar sector story updated for Tuesday closing prices)

NEW YORK ( TheStreet) -- A rally in the broader technology sector typically drives shares of solar companies higher, and that was the case on Tuesday.

A strong day for tech stocks was an even stronger day for solar players, with Trina Solar ( TSL) leading the gainers with a rise of close to 7% on Tuesday.

Many of the Chinese solar players were pacing the Tuesday rally, but recent U.S. dogs First Solar ( FSLR) and SunPower ( SPWRA) recovered from selling pressure to post gains on Tuesday, as well.

After SunPower released quarterly earnings last week and offered a weak 2010 outlook, the solar bears indicated that a share price above $20 could not longer be justified for the company .

SunPower has not climbed back above $20 since it fell from $22 a share to under $19 on Friday, but its shares have not slipped as low as the most-bearish Wall Street price target of $15. SunPower shares have advanced from Monday's closing low of $18.47, gaining 26 cents on Tuesday.

Many of the individual solar-stock gains were no more than-day-to-day recovery stories, as in the case of SunPower. Trading volumes were also average for the sector. Trina had slipped last week from a share price above $23 to as low as $20.54, when the company conducted a secondary equity offering.

Trina ended Tuesday's trading session at $22.52.

First Solar shares were up of 2.4% on Tuesday, a day after The Wall Street Journal suggested that First Solar shares had more room to slip, which the shares proceeded to do on Monday, falling below $110 for the first time since March 9. The movement in First Solar shares has been erratic for the past month. On Feb. 10, the stock was at the $109 mark, but have since reached as high as $126 and dipped as low as $102.

Joining Trina in the China solar rally were Solarfun Power ( SOLF) and LDK Solar ( LDK), both up close to 5.5% on Tuesday afternoon. Yingli Green Energy ( YGE) was up close to 4%.

LDK Solar, however, is one of the only names among the Chinese stocks whose share price has not declined below their level of mid-February and the first half of the last earnings season.

Solarfun announced a 5-megawatt project win in Germany on Tuesday, but 5 MW is no game-changer with capacity forecasts for solar firms reaching above 1 gigawatt for 2010.

As far as thematic news supporting a solar rally on Tuesday, there was an encouraging report from the European Union about its support for renewable energy. The EU's energy commissioner stated that investment in cleantech would double to 8 billion euros (or $10.8 billion) a year, in order to meet carbon-reduction goals. The EU minister, speaking at an annual sustainable energy conference, singled out wind and solar for investment above the current EU target of 3 billion euros annually.

In Europe, there was also an indication of more appetite for solar from the capital markets. Solar utility Engyco said on Tuesday that it planned to raise up to 1 billion euros in a public offering on the London Stock Exchange in April or May. Engyco would be the first publicly listed solar utility in Europe, according to Reuters.

Engyco's reasons for pursuing an IPO now also pointed to a possible bottom in at least one European solar market. Engyco, based in the Channel Island of Jersey, said it would use funds from the offering to fund acquisitions of distressed Spanish solar assets.

-Reported by Eric Rosenbaum in New York.


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