Stocks powered into the market close Thursday, completing a strong rally that took the major indexes up more than 3 percent and nearly 8 percent for the week.
The Dow Jones Industrial Average gained nearly 240 points, or 3.3 percent, led by bank and pharma stocks as well as General Electric. The Standard & Poor's 500 jumped more than 4 percent to 750, while the Nasdaq tech gauge gained 4 percent.
The surge marked the third straight gain for the Dow, after a tiny gain on Wednesdayand a nearly 6-percent burst on Wednesday, the best rally in more than three months. Stocks have been getting pounded this year, and this week fulfilled hopes for a bear rally long in coming even as the averages remain 18 percent lower for 2009.
Thursday's move higher started courtesy of better than expected economic news.
Retail sales fell 0.1 percentin February, the Commerce Department reported, as a rise in gasoline prices offset a slump in auto sales. Excluding auto sales, retail sales rose 0.7 percent.
Economists had expected declines of 0.5 percent and 0.2 percent, respectively. Stock index futures were indicating a gain of more than 1 percent for the market off the opening bell, but pared losses after the retail news and never looked back.
Initial jobless claims rose by 9,000 last week to 654,000, well above the 645,000 expected. Continuing claims, which smooth out weekly fluctuations, hit a new record, but the market seems to have become somewhat immune to bad jobs news.
Business inventories fell 1.1 percent in January, and December was revised lower to show a 1.6-percent drop, as companies pared back to better match slumping demand.
Traders will be keeping a close eye on a House hearing on the mark-to-market accounting rule, which many have blamed for exacerbating the financial crisis.
>> Watch a live-streaming video of the House hearing on mark-to-market
And in a Manhattan courtroom, Bernard Madoff pleaded guilty to all 11 felony counts against him and a judge ordered that he be immediately taken to jail, where he will await his June 16 sentencing.
Worries about the global economy persisted after World Bank President Robert Zoellick said the global economy may shrink 1 to 2 percent this year as revised Japanese data confirmed the world's No. 2 economy suffered its deepest slump since the oil shock of 1974.
Bank of America led Dow gainers and JPMorgan was right up there at the front of the pack. BofA CEO Ken Lewis said the company will not need more aid.
Citigroup also added to recent gains on trader sentiment that the government may not nationalize the troubled bank.
GE shares surged, in fact ranking among the Dow's top percentage gainers, in yo-yo trading as investors digested S&P's move to slash GE's credit rating to AA+amid concerns about its GE Capital unitwhile maintaining that the company's outlook is stable.
Pfizer and Merck were also among the biggest Dow gainers amid a flurry of M&A activity in the sector this week.
After a fierce battle that started last summer, Swiss drug maker Roche finally clinched the deal to buy the 44 percent of the US biotech group it doesn't already own after Genentech's board recommended shareholders accept the increased cash offer. The total value for the deal is $46.8 billion, or $95 a share.
Oil gained more than $1, trading above $43 a barrel, giving a boost to Dow energy components ExxonMobil and Chevron .
Industrial stocks surged, with the Dow Jones General Industrial index up 7.4 percent.
Homebuilder stocks rose even as a new report showed that home foreclosures resumed their upturn last month. Foreclosure filings rose 6 percent in February, RealtyTrac reported.
Freddie Mac reported a net loss of $23.9 billion, nearly 10 times that of a year ago. The loss followed $25.3 billion in red ink for the third quarter of 2008, it said in a statement.
Market breadth was strongly positive, with gainers beating losers 10 to 1 on the New York Stock Exchange, but volume was thin, with fewer than 1.3 billion shares changing hands as the day wound down.
Still to Come:
THURSDAY: Obama CEO roundtable
FRIDAY: International trade; import/export prices; consumer sentiment; Geithner to attend G20 meeting in UK.