WASHINGTON — First-time buyers taking advantage of a special tax credit gave sales of existing homes their biggest surge in a decade, raising hopes for a turnaround in the housing market and pleasing Wall Street.

While rising foreclosures and disappearing jobs still threaten the comeback, there are now bidding wars for houses in some cities, and home sales are nearly 36 percent above their low point in January.

Analysts said the gains in October mainly reflected the tax credit of up to $8,000 for new homeowners, which was due to expire this month before Congress extended it until spring — and expanded it to more buyers.

The sales figures Monday from the National Association of Realtors provided the juice for a rally on Wall Street. The Dow Jones industrial average, also lifted by a weak dollar, rose more than 130 points.

Analysts said the extension of the homebuyer tax credit should help sustain the housing market next year. Yet the overall economy will probably benefit only slightly from higher home sales.

That's because there are still too many factors weighing down the recovery. Foreclosures are rising. Job creation is slow. People remain reluctant to spend. And construction of new homes — as opposed to sales of existing ones — plunged in October.

The biggest contribution the housing industry makes to economic growth is from home building. Commissions and fees generated from home sales also help, but far less than construction.