Stocks lifted by Goldman Sachs' good news on subprime and Wal-Mart's strong earnings report

NEW YORK — Wall Street rebounded Tuesday after Wal-Mart Stores Inc. posted better-than-expected earnings and Goldman Sachs Group Inc. reassured investors by saying it didn't expect a significant hit from the subprime turmoil. The Dow Jones industrials climbed more than 150 points.

The rally held up even after Bank of America Corp. announced plans to book $3 billion in pretax charges on its collateralized debt obligations. Goldman, meanwhile, indicated it would not be taking any significant writedowns on its exposure to the subprime mortgage market.

Goldman Chief Executive Lloyd Blankfein, speaking at a conference held by Merrill Lynch, said the bank has a short position in the subprime mortgage market and won't be taking any significant charges to write off losses. But Bank of America joined other big financial companies including Citigroup Inc. and Merrill Lynch & Co. in announcing heavy writedowns; BofA said it will record $3 billion in pretax writedowns in the fourth quarter.

Investors have been anxiously waiting to see how much fallout there would be from months of credit market problems, so they were heartened by Goldman's news.

The good news from Goldman helped calm some investor uncertainty about the extent of the banking industry's writedowns, said Todd Leone, managing director of equity trading at Cowen & Co.

"People just want to know what's out there," he said. "They want to feel like they're being told the truth."

Investors also were pleased when Wal-Mart, the world's largest retailer, reported third-quarter profit that surpassed projections and hinted that consumer spending might be stronger than anticipated this holiday shopping season. 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.

"Over the last week there has ben so much bloodshed on the Street, it's finally enticed people back to the market," said Ryan Larson, senior equity trader at Voyageur Asset Management. "At some point, it's hard to turn your head when all these issues become so cheap."

In midday trading, the Dow rose 167.29, or 1.29 percent, to 13,154.84 after earlier being up more than 200.

Broader indexes were also higher. The Standard & Poor's 500 index jumped 18.26, or 1.27 percent, to 1,457.44, and the Nasdaq composite index was up 48.75, or 1.89 percent, at 2,632.88.