Today’s market rally has something in common with Gary Condit’s testimony — no one really believes it.

At midday, the TSE 300 is up 59 points to 7,601.

Markets opened a bit higher, after Cisco Systems indicated that its sales are on track. But it is believed that short-covering accounts for much of today’s rally, as traders jump on a rare upward blip, feeding its momentum.

Volume is decent for a Friday in August, with 59 million shares changing hands. Volume favours buyers by a margin of more than two to one. Market breadth gives the bulls a slight edge.

On a sector basis, the rally is running the gamut from mines to the tech-led industrials, and conglomerates. Merchandisers and financials boast decent gains, too. There is weakness in transports, golds, real estate and paper stocks. Everything else is up.

Techs are charging higher on hopes that Cisco is right and the tech business is not yet dead. Nortel Networks is up almost 4% today on 4.4 million shares.

There are some decent gains in tech blue chips such as Celestica, JDS Uniphase, Telesystem International Wireless, JDS Uniphase and Research in Motion.

Exfo Electro is also strong, up almost 11%, on news that it is buying a small Montreal firm, Avantas Networks, for US$93 million in stock and cash. Exfo is to pay US$36 million in cash and 4.4 million shares to buy Avantas, which has 100 employees. The acquisition broadens the scope of Exfo’s product line.

Techs aren’t the only movers out there, though, the rally has broadened a little, including stocks such as Rogers, CP, Ballard Power, Anderson Exploration, Fairmont Hotels and Inco. Both Royal Bank and CIBC are helping to power the financials higher.

The downside is a wonky collection of stocks including WestJet, Geac Computer, Mosaid Technologies, Domtar, Dofasco and Bombardier.

On the earnings front, Electrohome Ltd. is reporting a net loss for the quarter of $1.4 million, compared with a loss of $300,000 for the same quarter last year

U.S. markets are doing their version of the Condit climb, too. Traders are enjoying it, but no one is convinced that is signals a major turn in the market.

The Dow Jones industrial average is up about 202 points to 10,432. The Nasdaq composite index is up 55 points to 1,898. The S&P 500 has gained 21 points to 1,183. News that U.S. home sales remain strong is also supporting markets.

The CDNX is joining the rally today, gaining three points to 3,054. Volume is average at 15.3 million shares. Techs are up, oils are down, mines are flat. Commerce Resources Corp is the top trader, up 65% to 33¢ in its debut, with 1.7 million shares crossing the floor.