U.S. stocks gained for a third day on Thursday on relief that S&P cut General Electric's ratings by just a single notch and signaled no further downgrades loomed, while data suggested some stabilization in consumer spending.
Wal-Mart Stores Inc
It's a combination of better-than-expected retail sales and the GE news, said Cleveland Rueckert of Birinyi Associates in Stamford, Connecticut. A lot of things are priced for the apocalypse, but they're not quite that bad.
Investor sentiment was also lifted by news of a takeover in the biotechnology sector, driving up shares of health-care companies. An S&P health-care sector index <.GSPA> rose 4.2 percent.
The Dow Jones industrial average <.DJI> rose 152.20 points, or 2.20 percent, to 7,082.60. The Standard & Poor's 500 Index <.SPX> gained 16.99 points, or 2.36 percent, to 738.35. The Nasdaq Composite Index <.IXIC> added 27.51 points, or 2.01 percent, to 1,399.15.
GE, among the Dow's major gainers, was up 11.8 percent at $9.49 at midday. For the year to date, though, GE's stock price is down 41 percent.
A higher finish on Thursday would mark the S&P 500's first three-day run-up in more than a month. The Dow industrials could close above the 7,000 level for the first time since February 27.
Even so, caution about the labor market kept gains in check as weekly jobless claims data showed a record high number of workers drawing unemployment benefits as the recession takes its toll.
Shares of big manufacturers like Caterpillar
But the financial sector provided another top boost to the Dow, with Bank of America
On Nasdaq, biopharmaceutical company Gilead Sciences Inc
Gilead shares fell 1.7 percent to $43.29, while CV's shares soared 28.1 percent to $20.50.
Shares of peer Celgene Corp
Shares of General Motors
U.S. front-month crude oil climbed 5 percent, or $2.15, to $44.48 per barrel. Exxon Mobil Corp
(Additional reporting by Deepa Seetharaman; Editing by Jan Paschal)