NEW YORK, Nov 13, 2007 (AP) -- Wall Street rebounded in early trading Tuesday after Wal-Mart Stores Inc. posted better-than-expected earnings and hinted that consumer spending might be stronger than anticipated this holiday shopping season.

The world's largest retailer reported third-quarter profit surpassed Wall Street projections. The results also showed that heavy discounting during the period did not hurt margins, which the company said bodes well for the fourth quarter.

The report gave investors a reason to buy a day after a turbulent session pushed the Dow Jones industrial average below 13,000 for the first time since August. The advance snapped a four-day losing streak for the blue chip index.

Investors were also expected to position their portfolios ahead of key economic data out during the week. Two key barometers of inflation and the economy will be released, with the Labor Department's Producer Price Index on Wednesday and the Consumer Price Index on Thursday.

Wall Street will also receive new data on the slumping housing sector. The National Association of Realtors will issue its September reading of an index that tracks pending U.S. home sales, and release an update on the housing market forecast for 2007 and 2008. The reports, due out at 3 p.m. EST, are expected to show housing hit another record low during the month.

In midmorning trading, the Dow Jones industrial average rose 108.60, or 0.84 percent, to 13,096.15.

Broader indexes were also higher. The Standard & Poor's 500 index jumped 15.03, or 1.04 percent, to 1,454.21, and the Nasdaq composite index was up 32.22, or 1.25 percent, at 2,616.35.

Bonds fell as investors moved back into stocks. The yield on the benchmark 10-year Treasury note rose to 4.23 percent from 4.22 percent late Friday. The market was closed Monday in observance of Veterans Day.

Oil prices dropped after a key OPEC member left open the possibility the oil cartel will increase output to curb rising prices, and following the strengthening of the dollar overnight. A barrel of light sweet crude fell $1.08 to $93.54 on the New York Mercantile Exchange.

Gold prices edged lower.

Wal-Mart spiked $2.42, or 5.6 percent, to $45.74 after the retailer said quarterly profit rose 8 percent as it heads into the holiday shopping season. Chief Executive Officer Lee Scott said it has been a tough year for consumers, but that the company's new focus on pricing is paying off.

TJX Cos. _ the operator of T.J. Maxx and Marshalls _ reported third-quarter profit rose 13 percent. Results, which missed Wall Street expectations, were hurt by unseasonably warm early fall weather. Shares added $1.10, or 3.8 percent, $30.42.

Home Depot Inc., the world's largest home improvement chain, reported third-quarter results fell 26.8 percent because of the continuing slump in the housing sector. Shares fell 39 cents to $28.07.

Troubled lender Countrywide Financial Corp. said total mortgage origination volume fell 48 percent in October due to continued weakening of the mortgage market and the company's decision to cut down on its subprime lending operations. However, shares rose 26 cents, or 2 percent, to $13.45 after Countrywide said it significantly reduced some of its riskier loans that triggered recent financial problems.

The Russell 2000 index of smaller companies rose 8.36, or 1.09 percent, to 775.45.

Advancing issues led decliners by a 3 to 1 basis on the New York Stock Exchange, where 56.2 million shares were traded.

Overseas, Japan's Nikkei stock average closed down 0.46 percent and Hong Kong's Hang Seng index rose 0.50 percent. In afternoon trading in Europe, Britain's FTSE 100 rose 0.43 percent, Germany's DAX index fell 0.25 percent, while France's CAC-40 added 0.15 percent.