NEW YORK (AP) — Wall Street rebounded as bond yields eased and stronger-than-expected economic data lent some stability to stocks, following a string of volatile sessions.The advance in the stock market followed a plunge a day earlier that was fuelled by a surge in bond yields to five-year highs. Rising bond yields amid inflation concerns have pummelled stocks since last week.

Though rate worries still dog investors, their confidence perked up after the Commerce Department said Wednesday that retail sales jumped 1.4 percent in May. The rise, which followed a 0.1 percent decline in April, was the highest in 16 months and double the increase analysts expected.

The jump in sales signalled to investors that consumers plan to keep spending and pushing the economy along even as gas prices and other costs increase. Wednesday's sales report came after a relative lull in data that left Wall Street wanting for fresh indicators about the strength of the economy.

"It's a little bit of a sigh of relief about the economic numbers, which on the surface look really strong," said Hank Herrmann, chief executive of Waddell & Reed. But he added that the May spending figures when combined with lacklustre results in April indicate a more tepid rise in retail sales.

Investors were also pleased about the Federal Reserve's Beige Book report, which said the US economy kept expanding at a moderate pace in the first part of the second quarter. The central bank's next meeting on interest rates will be held in two weeks.

In mid-afternoon trading, the Dow Jones industrial average rose 112.80, or 0.85 percent, to 13,407.81. The Dow bounced around during the session as investors continued to grapple with the possibility of higher interest rates.

Broader stock indicators also rose sharply. The Standard & Poor's 500 index advanced 14.42, or 0.97 percent, to 1,507.42, and the Nasdaq composite index rose 22.74, or 0.89 percent, to 2,572.51.

Bond yields, whose advance caused a pullback in stocks last week and again Tuesday, spiked early Wednesday before falling back with release of the new economic data. The yield on the benchmark 10-year Treasury note slipped to 5.22 percent from 5.295 percent Tuesday.

Rising oil prices didn't upend the stock market's gains. Light, sweet crude climbed 90 cents to $66.25 per barrel after the government reported that US crude oil stocks increased by a modest 100,000 barrels last week, while gasoline inventories were flat. Investors had expected stores of gasoline would rise.

The dollar rose against other major currencies, and gold prices also increased.

In other economic news, the Labor Department said US import prices rose a higher-than-expected 0.09 percent in May, the third consecutive monthly increase, as costs rose for food, energy and automobiles.

The Commerce Department reported that US businesses added to their stores of unsold goods in April at a faster-than-expected pace. The increase could suggest businesses are ending efforts to draw down their inventories in the face of a slowing economy.

Last week, investors regarded inflation levels that appeared defiantly above the Fed's comfort level as a sign that the central bank wouldn't cut short-term interest rates. As yields move in the opposite direction of bond prices, market interest rates soared. The 10-year Treasury yield climbed above five percent for the first time since last summer.

Herrmann contends that June should provide a more accurate reflection of the state of the economy and that data due Thursday and Friday on inflation could weigh heavily on the markets.

"If they come out negative we'll probably see another sell-off in both bonds and stocks," he said, referring to the inflation figures.

In corporate news, Blockbuster rose 33 cents, or 8.1 percent, to $4.27 after a Citigroup analyst praised the company's plan to offer less expensive online rentals, noting the reduced prices could allow the movie rental chain to raise prices on program that lets customers rent both online and in stores.