XM Satellite (XMSR) surged 16% Tuesday after Bear Stearns boosted its rating on the struggling satellite broadcaster to outperform from underperform.

Rival

Sirius

(SIRI) - Get Report

joined in the rally, which came as the market put in a flat performance. Sirius rose 4%.

Happy developments have been few and far between lately for investors in the once-hot sector. Even after Tuesday's rally, XM has lost more than half its value this year and Sirius is down 40%. The yearlong swoon by XM and Sirius comes as investors have grown less comfortable with risky tech stocks as interest rates rise, threatening a possible recession down the road.

The selloff has some fans calling for a merger of the companies, both of which are losing money but hope to turn breakeven on a very limited cash flow basis in coming quarters.

On Tuesday, XM surged $1.79 to $13.03 and Sirius rose 13 cents to $4.03.