NEW YORK, Nov 27, 2007 (AP) -- Wall Street rebounded modestly Tuesday after the Abu Dhabi Investment Authority said it will invest $7.5 billion in Citigroup Inc. _ a vote of confidence for the nation's largest bank, which has suffered severe losses amid the ongoing crisis in the mortgage market.

The banking industry has been battered in recent months as defaults on home loans have risen and rendered some mortgage-backed securities essentially worthless. Major financial institutions, including Citi and its competitors, have had to book some $80 billion of writedowns on those holdings _ a trend that has left the markets nervous about the full extent of the damage.

Investors were relieved that Citi was able to secure an injection of capital, and that others might be able to do the same thing. Concerns about further writedowns caused the Dow Jones industrials to plunge 240 points Monday, bringing the blue chip index, along with the Standard & Poor's 500 index, down 10 percent from recent highs, a decline that signifies a correction.

The market showed little reaction to a report from the Conference Board that its Consumer Confidence Index dropped to its lowest point since October 2005. The index dropped to 87.3 for November, down almost 8 points from the revised 95.2 during October _ and below analyst expectations for a reading of 91.5.

The Dow rose 95.27, or 0.75 percent, to 12,838.27.

Broader stock indexes also moved higher, with the S&P 500 index up 8.14, or 0.58 percent, at 1,415.36, and the Nasdaq composite index up 17.25, or 0.68 percent, at 2,558.24.

A pullback in oil prices aided the market's gains. A barrel of light, sweet crude dropped $3.07 to $94.63 on the New York Mercantile Exchange on expectations that the Organization for Petroleum Exporting Countries will raise production at its Dec. 5 meeting.

Government bond prices fell. The yield on the 10-year Treasury note rose to 3.93 percent from 3.85 percent late Monday.

Abu Dhabi's purchase of a stake in Citigroup will make the Gulf Arab state one of the bank's largest shareholders. Sheikh Ahmed Bin Zayed Al Nahayan called Citi "a premier brand and with tremendous opportunities for growth."

Citigroup shares rose 70 cents, or 2.4 percent, at $30.50.

In other corporate news, Barclays Group PLC, Britain's No. 3 bank by market value said retail banking in the United Kingdom was delivering good growth and the company projected 2007 earnings per share would be "broadly in line" with the current market consensus.

Earnings news from retailers was mixed Tuesday.

Staples Inc., the world's largest office products supplier, said third-quarter profit fell 5 percent due to lower sales at stores open at least one year, or same-store sales, and costs from a legal settlement. Excluding the settlement charge, earnings topped Wall Street expectations _ and shares surged $2.54, or 13 percent, to $22.30.

American Eagle Outfitters Inc.'s fiscal third-quarter earnings slipped 1.5 percent on weaker-than-expected sales and higher markdowns, but the results met analysts' consensus forecast. The retailer of casual clothes for teens said same-store sales this month are "slightly positive." Shares rose 7 cents to $21.44.

Pulte Homes Inc. shares rose 20 cents, or 2.3 percent, to $9.36 after it said late Monday that housing demand remains weak and inventories high but the homebuilder reaffirmed its fourth-quarter forecast. The company expects to break even or earn as much as 10 cents per share.

The Russell 2000 index of smaller companies rose 4.34, or 0.59 percent, to 739.41.

Advancing issues outpaced decliners by a 3 to 1 on the New York Stock Exchange, where volume came to 96.3 million shares.

Overseas stock markets were mixed. Britain's FTSE 100 fell 1.21 percent; Germany's DAX index lost 1.15 percent and France's CAC-40 declined 0.66 percent. In Asia, Japan's Nikkei stock average closed up 0.58 percent. Hong Kong's Hang Seng index fell 1.51 percent.

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