U.S. stocks rallied to rebound from sharp losses as a drop in oil prices eased concern that the biggest decline in consumer confidence since the 2001 terrorist attacks would lead to reduced spending.

The Dow Jones industrial average rose 51.26, or 0.7 percent, to 7909.50. The Nasdaq composite index climbed 6.60, or 0.5 percent, to 1328.98, after falling as much as 2.1 percent.

The Standard & Poor's 500-stock index rose 5.99, or 0.7 percent, to 838.57. Consumer stocks led the advance, which reversed a 1.7 percent slide.

Share prices sank to the day's lows after the Conference Board said its index of consumer confidence tumbled to 64 in February from 78.8 last month.

Stocks rebounded as oil futures fell 1.2 percent on the New York Mercantile Exchange, erasing a 1.7 percent gain. Light, sweet crude oil for April delivery settled at $36.06, down 42 cents.

Energy Secretary Spencer Abraham told members of Congress the government is prepared to tap strategic oil reserves in the event war in Iraq disrupts supplies.

Wal-Mart rose 79 cents, to $48.43. General Electric, which makes products including appliances and power turbines, climbed 56 cents, to $23.98. Altria Group, owner of the world's largest cigarette maker, rose 80 cents, to $38.05.

Home Depot rose 66 cents, to $22.84. The largest home-improvement chain reported a fourth-quarter profit that topped analysts' estimates and repeated its 2003 earnings growth forecast of 9 to 14 percent.

Media stocks including Comcast and AOL Time Warner rose after Omnicom Group, the world's biggest owner of advertising agencies, said fourth-quarter profit rose 23 percent as it won more accounts.

Comcast, the largest U.S. cable-television company, gained $1.65, to $27.12. AOL Time Warner, the biggest Internet and media company, rose 37 cents, to $10.43. Omnicom climbed $3.35, to $57.35.

El Paso, the biggest U.S. owner of natural gas pipelines, rose 45 cents, to $5. The company obtained $1 billion in secured financing to repay debt coming due next month and will sell $700 million in notes to raise cash.

Cisco Systems fell 34 cents, to $14.08. Merrill Lynch analyst Tal Liani said a presentation today by Dennis Powell, Cisco's senior vice president of corporate finance, didn't indicate that demand for the company's networking gear was recovering.

Other Indicators

* The New York Stock Exchange composite index rose 7.16, to 4713.38; the American Stock Exchange index fell 0.66, to 828.58; and the Russell 2000 small-cap index rose 2.98, to 361.20.

* Advancing issues outnumbered declining ones by 7 to 5 on the NYSE, where trading volume rose to 1.47 billion shares, from 1.21 billion on Monday. On the Nasdaq, advancers outnumbered decliners by 10 to 9 and volume totaled 1.38 billion, up from 1.21 billion.

* The price of the Treasury's 10-year note rose $2.19 per $1,000 invested, and its yield fell to 3.82 percent, from 3.85 on Monday.

* The dollar fell against the yen and rose against the euro. In late New York trading, a dollar bought 117.25 yen, down from 117.92 on Monday, and a euro bought $1.0769, down from $1.0791.

* Gold for current delivery fell to $352.30 a troy ounce from $356.30 on the New York Mercantile Exchange's Commodity Exchange.