Canadian and U.S. markets rallied after a slow start Tuesday morning, pushed ahead mostly by gains in the technology sector.

At midday, the S&P/TSX composite index was ahead 20.15 points or 0.21% at 9605.37 after closing up 26.72 points on Monday, while the TSX Venture Exchange was down 1.88 points or 0.10% at 1886.27.

On Wall Street, the Dow Jones industrial average added 45.89 points or 0.43% at 10837.02 following Monday’s 4.88-point loss. The Nasdaq was up 17.51 points or 0.84% at 2100.42 following a 6.25-point gain in the previous session and the S&P 500 index edged up 4.94 points or 0.41% to 1211.08.

The Canadian dollar was up 0.01 of a cent at US81.06¢.

In Toronto, the catalyst seemed to be tech stocks.

Canadian tech stocks gained 0.81%, led by Reasearch in Motion Ltd., which added $1.91 or 2.47% to $79.05; Sierra Wireless Inc. was up 31¢ or 3.34% to $9.58; and Cognos Inc. shares gained 77¢ or 1.79% to $43.80

Elsewhere on the TSX, the TSX energy sub-group was up 0.36% as oil prices edged higher. The price of light, sweet crude for March delivery on the Nymex was up 19¢ to US$47.63 a barrel following signals from OPEC of a possible production cut of up to one million barrels a day at its March 16 meeting.

In New York, Investors welcomed reports about the bid for Circuit City Stores Inc. and were cheered by strong retail sales data.

Circuit City said Tuesday that an investment firm has made an unsolicited offer to buy the company for US$3.25 billion or US$17 per share, and take it private. Highfields Capital Management’s cash bid represented a 20% premium to Circuit City’s share price of US$14.26 at the close of trading Monday. The electronics retailer’s shares ran up $2.57 or 18.06% to US$16780.

Qwest Communications International Inc. added 5¢ to US$4.03 after the telecom company reported a narrower-than-expected fourth-quarter loss. The company credited stronger broadband Internet sales and sales of bundled products for the improvement. The company did not discuss any merger or acquisition plans after its failed bid for MCI Inc.

Talks between Federated Department Stores Inc. and May Department Stores Co. have broken down, according to The Wall Street Journal, after the two could not agree on a final price for May. Shares of May slid 27¢ to US$31.59, while Federated added 79¢ to US$58.04.

Wall Street welcomed the Commerce Department’s report that overall retail sales fell 0.3% in January, less than the 0.5% economists expected. Taking sluggish auto sales out of the equation, retail sales rose 0.6%, also better than expected.

Volume was light prior to Federal Reserve Chairman Alan Greenspan’s congressional testimony on Wednesday and Thursday, when he’ll give his semi-annual report on the economy.

Overseas, Japan’s Nikkei stock average rose 0.12%. In afternoon trading, Britain’s FTSE 100 was up 0.28%, Germany’s DAX index gained 0.22%, and France’s CAC-40 climbed 0.2%.