UPDATE 2-Wal-Mart, other discounters top February estimates

(Recasts with details on rivals, comments, share activity, byline; changes headline)

By Martinne Geller

NEW YORK, March 6 (Reuters) - U.S. discount chains posted better-than-expected gains in February sales at existing stores on Thursday, as cash-strapped consumers looked for bargains on everyday items like food, medicine and laundry detergent.

Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research), the world's largest retailer, said sales at its U.S. stores open at least a year rose 2.6 percent, excluding sales of fuel, helped by strength in its grocery, health and electronics departments. The company also cited improving trends in its apparel business.

Analysts, on average, were expecting a rise of 1.1 percent, according to Reuters Estimates, while Wal-Mart had forecast same-store sales to be between flat and up 2 percent.

Including sales of gasoline, same-store sales rose 3 percent.

Wal-Mart shares were up 1 percent in midday trading, one of the few retail stocks on the plus side.

Wal-Mart's positive surprise helped fuel a 2 percent increase in average same-store sales for the entire retail sector as tracked by Retail Metrics. That topped the tracking firm's expectation for a 1.2 percent increase and was the best monthly gain since November.

The slowing U.S. economy has made consumers more conscious of their spending as they grapple with declining home values, resetting mortgage payments and higher food and fuel costs.