Investors holiday shop on Wall Street

BENTONVILLE, Ark. -- A year after its worst holiday sales season ever, Wal-Mart may rebound to have a good season after all.

A whiff of this showed up when the nation's largest retailer posted third-quarter earnings Tuesday of $2.86 billion, an 8 percent rise that beat Wall Street expectations.

The news helped U.S. stocks snap a four-day losing streak with Nasdaq notching its biggest gain in more than four years.

The Dow Jones industrial average surged 319.54 points, or 2.46 percent, to close at 13,307.09. The Nasdaq index shot up 89.52 points, or 3.46 percent, to finish at 2,673.65.

Nasdaq stocks shot up on news that Apple Inc. is in talks to offer iPhones in Chinam which sent investors bargain hunting among the battered technology sector.

Retailers also caught fire with the surprisingly strong earnings from Wal-Mart Stores Inc.

Michael P. Niemira, chief economist and director of research for the International Council of Shopping Centers, said an uncertain economy will send more shoppers to discounters for holiday purchases. Even if Wal-Mart's core lower income shoppers spend less, consumers with more money are also likely to switch to discounters including Wal-Mart, he said.

At the same time, Niemira said Wal-Mart is working to address past problems.

"I actually think they may perform remarkably well this holiday season," Niemira said.

Wal-Mart shares spiked $2.65, or 6.1 percent, to close at $45.97 Tuesday.

Another story of the day, though, was clearly the rebound in technology after a four-day drubbing that drove the Nasdaq down more than 8 percent. In addition to Apple, an upbeat outlook from Corning Inc., which makes glass for flat-screen televisions, also contributed to the turnaround in tech stocks.