By Kate Gibson

Wall Street's six-week run-up resumed on Tuesday as technology shares displayed further signs of life in a second day of M&A activity in the sector, with analysts pondering how long banks would direct the broader market's moves.

"We're not too far away from ramping up and having inventory for the holiday season. I think iPods, laptops, electronics will be hot sellers again," said Tim Speiss, head of the wealth-management division at Eisner LLP, who lists the consumer sector as among the barometers to watch for signals of a full-fledged economic turnaround.

"Health care and technology are going to be strong indicators as well," said Speiss.

On Tuesday, stocks finished solidly higher after wavering between gains and losses early on. The Dow Jones Industrial Average (DJI) gained 127.83 points, or 1.6%, to 7,969.56. The S&P 500 (SPX) advanced 17.69 points, or 2.1%, to 850.08, while the technology-laden Nasdaq Composite (RIXF) climbed 35.64 points, or 2.2%, to stand at 1,643.85.

"U.S. equities turned the corner and rebounded led by the technology sector following a solid earnings result from Texas Instruments Inc. (TXI) and this was compounded on the blue chips by a better than expected profit reading from diversified manufacturer United Technologies Corp. (UTX). A merger bid in tech also fueled some investor appetite after Broadcom Corp. (BRCM) made an unsolicited bid for Emulex Corp. (ELX)," said analysts at Action Economics. .

Tuesday's M&A activity followed word the prior day that software goliath Oracle Corp. (ORCL) planned to acquire Sun Microsystems Inc. (JAVA) for $7.4 billion, and GlaxoSmithKline plc's announcement (GSK) of a $3.6 billion deal for Steifel Laboratories.

Monday pattern

Despite finishing higher for the past six weeks straight, the Dow Jones Industrial Average (DJI) hasn't risen on a Monday since March 23. That pattern persisted as the current week began, with the blue-chip index falling nearly 300 points.

"After six straight weeks moving higher, we needed a pause," said Marc Pado, U.S. market strategist at Cantor Fitzgerald.

Other analysts agreed.

"We view yesterday's action as a normal short-term trading correction in what is a broader longer-term uptrend which is being supported by better than expected earnings, and early signs of economic stabilization," said Robert Pavlik, chief market strategist, Banyan Partners LLC.

While many are looking to the tech sector to "lead us out of the current malaise," and the stocks themselves may outperform going forward, the fact remains that worldwide technology spending is down," said Dan Greenhaus, equity strategy group, Miller Tabak & Co.

Bank stocks had led Monday's market declines as a slew of earnings reports intensified concern that the credit and economic climate is less rosy than might have been suggested in the sector's April rally.

"The market is rethinking credit risk and the health of the financial sector in light of Bank of America Corp.'s (BAC) profit report, uncertainty over the stress test, and the government policy toward the banking sector," Nick Kalivas, an equity analyst at MF Global.

Bank of America's results, reported Monday, illustrated "everything right and wrong with the financial sector this quarter," said Pado.

"These are not revenues that will be repeated, a common complaint about much of the bank earnings this past quarter," Pado said. .

"Positive bank earnings largely represent a combination of one-off trading gains and shifts in accounting rules designed to mask the damage to the financial markets," said TJ Marta, Marta on the Markets.

"A lot of this might have been smoke as far as first-quarter earnings go. I don't think we can totally state we're out of the woods for a couple more quarters," said Speiss.