Walmart had a blowout holiday quarter

By Nathaniel Meyersohn, CNN Business

(CNN) -- Walmart's all-important holiday sales blew past expectations, a sign the retailer can more than hold its ground against Amazon.

Sales in the United States grew 4.2% over the holiday stretch compared with last year, including a 43% rise in digital sales.

Walmart said its online sales got a boost from rolling out grocery pickup to stores across the country. It also expanded delivery to reach more shoppers. More than 10% of Walmart shoppers used curbside pickup in January, according to data from Cowen. Walmart's online sales grew steadily all of last year.

Low unemployment, rising wages, and a drop in gas prices also helped Walmart during the holidays. CEO Doug McMillon credited the strong economy for Walmart's big quarter.

Walmart's strong holiday should calm fears about a troubling report from the Commerce Department last week, which showed core retail sales plummeted 1.7% in December, the most in nearly two decades.

Walmart's stock jumped 5% in pre-market trading Tuesday.